NBS: Key policy rate kept at 5.75%

At its meeting yesterday, the NBS Executive Board voted to keep the key policy rate at 5.75%. It also kept the deposit facility (4.5%) and lending facility (7.0%) rates unchanged, the National Bank of Serbia (NBS) announced.

In making the decision, the Executive Board primarily took into account actual and expected inflation, as well as risks from the international environment that could affect its trajectory, the press release says.

As pointed out, y-o-y inflation accelerated slightly in August, to 2.2% from 1.9% in July, primarily due to the persisting energy shock and higher global oil prices. The Executive Board expects that the low last year’s base arising from the application of the decree capping trade margins will cause inflation to hover around 4% as of September this year.

The Executive Board expects economic growth to amount to at least 3.2% this year and to accelerate to around 4.5% next year. The main driver of economic activity growth is expected to be domestic demand, with both consumption and investment providing a positive contribution, supported by higher disposable income and further implementation of infrastructure projects under the “Leap into the Future – Serbia EXPO 2027” program.

The next rate-setting meeting will take place on November 12.

Narodna banka Srbije Beograd

NBS

key policy rate