NBS Raises Key Policy Rate to 6.25%

At its meeting today, the NBS Executive Board voted to raise the key policy rate by 25 bp to 6.25%. It also raised the deposit and lending facilities rates to 5% and 7.5%, respectively, the National Bank of Serbia (NBS) announced.

In making the decision, the Executive Board, as added in the press release, concluded it is necessary to continue to moderately tighten monetary conditions to pre-empt a surge in inflation expectations and make sure that inflation strikes a downward path and returns within the target tolerance band in the projection horizon.

Consistent with Executive Board’s expectations, inflation reached a peak in March and decelerated to 15.1% y-o-y in April, mostly reflecting the slowdown in food price growth, which was the main contributor to inflation in the prior period.

– Under the current projection, the Executive Board anticipates that y-o-y inflation will continue to move on a downward path, falling more sharply in H2 2023. Its return within the bounds of the target (3±1.5%) is expected in mid-2024 – the press release says.

The next rate-setting meeting will be held on July 13, 2023.

Narodna banka Srbije Beograd

National Bank of Serbia

key policy rate

lending facilities rates

deposit facilities rates

inflation