Key policy rate in Serbia lowered to 4%

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The Executive Board also adopted amendments to the Decision on NBS Interest Rates, by which the interest rate corridor relative to the key policy rate was narrowed from +/-1.75% to +/-1.50%.

This measure, in the Executive Board’s estimate, will contribute to further stabilization of interest rates in the interbank money market.

It was estimated that low inflationary pressures would persist in the coming period, above all those stemming from the majority of domestic factors.

The Executive Board believes that growing uncertainties in the international environment warrant caution in the conduct of monetary policy. This primarily relates to the impact of Brexit on international and financial commodity markets, and with that on emerging economies, including Serbia.

- External risks are expected to be moderated not only by Serbia’s better macroeconomic performances, but also by the possible further monetary accommodation by the ECB and the Bank of England and slower than initially expected monetary tightening by the Fed – the NBS stated.

The next rate-setting meeting will be held on August 11.