(Updates with currencies, analysts from third paragraph.)
Jan. 30 (Bloomberg) -- The Serbian dinar may gain to its strongest in three months against the euro as foreign-currency purchases by local companies abate and sales of government debt fuel foreigners’ demand for the dinar, Societe Generale SA said.
The dinar is poised to appreciate to 101 per euro from 106.3081 at the end of last week, Guillaume Salomon in London and Sanja Rajkovic Trebaljevac in Belgrade, analysts with Societe Generale, wrote in a report to clients today.
Demand for the dinar will rise as foreign investors take part in domestic government-debt auctions, according to SocGen. The currency has gained 1.4 percent against the euro this month, compared with a 6.7 percent rally for Hungary’s forint and a 4.9 percent gain for Poland’s zloty. The dinar tumbled 2.9 percent in December to its weakest in almost a year as companies, including energy importers, stocked up on foreign currencies.
“The underperformance of the dinar year-to-date has been mainly driven by corporate flows,” the analysts said. “Not only do we believe that these flows should be coming to an end but we also believe that the heavy supply calendar over the coming month will also lend support to the dinar.”
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