NBS keeps key policy rate at 4%

The Executive Board of the National bank of Serbia decided to keep the key policy rate unchanged at 4 percent at the meeting held on September 8. In making that decision, the Executive Board was guided by the effects of past rate cuts and the inflation outlook for the period ahead, the NBS reported.

The NBS assesses that the return of year-on-year inflation within the target tolerance band in the first half of 2017 will be led primarily by the gradual increase in aggregate demand at home and inflation abroad, as well as by the low-base effect of petroleum product prices, while low food production costs will continue to hold inflation back for some time to come.

As it was said, the Executive Board also took into consideration persistent uncertainties in the international commodity and financial markets and their potential impact on inflation and capital flows to emerging market economies.

However, as they say in the report, the resilience of the Serbian economy to external shocks has increased, reflecting consistent implementation of fiscal consolidation measures and structural reforms.

Owing to this, fiscal imbalances have narrowed down, while Serbia’s macroeconomic prospects have improved significantly, as confirmed by the IMF in the fourth and fifth reviews of the arrangement, the NBS reminds.

The next rate-setting meeting of the Executive Board is scheduled for 13 October.

Narodna banka Srbije Beograd

Međunarodni monetarni fond-MMF Beograd

key policy rate

inflation in Serbia