NBS keeps key policy rate at 4%

The Executive Board of the National Bank of Serbia (NBS) has kept the key policy rate at 4%. In reaching this decision, the Executive Board took into consideration the effects of past monetary easing policy and the inflation outlook for the period to come.

According to the NBS’ estimate, the return of year-on-year inflation within the target tolerance will be influenced primarily by the low-base effect of petroleum product prices and the gradual increase in aggregate demand in Serbia and inflation abroad, whereas the low food production costs will continue to hold the inflation back for some time.

The Executive Board also kept in mind the ongoing uncertainties in the international commodity and financial markets and the impact of risks thereof on inflation and capital flows in emerging market economies.

The resilience of the Serbian economy to external shocks is stronger than before thanks to consistent implementation of fiscal consolidation measures and structural reforms, the NBS states.

– Hence, fiscal and external imbalances have continued down and Serbia’s macroeconomic prospects have improved further, as confirmed by the projections of relevant international institutions. Looking ahead, it may also be expected that the risks from the international environment will be moderated by the more accommodative monetary policy stance of leading central banks – the NBS estimates.

Narodna banka Srbije Beograd

NBS

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