Key Policy Rate Still at 6.5%

At its meeting on Friday, the NBS Executive Board voted to keep the key policy rate on hold, at 6.50%. Interest rates on deposit (5.25%) and credit facilities (7.75%) were also kept unchanged, announced the Cabinet of the Governor of the National Bank of Serbia (NBS).

– The Board’s decision is underpinned by the continued easing of global inflationary pressures and the established downward path of domestic inflation and its expected return within the target tolerance band over the monetary policy horizon – the press release says.

It is added that the Board also took into account the fact that monetary conditions were tightened in the previous period through the main instrument – the interest rate, and in September also by increasing the reserve requirement ratio, with the full effects of these measures yet to be played out.

– In making the decision, the Executive Board had in mind that headline inflation is falling in the international environment, although the recent rise in energy prices and elevated wage costs still mandate caution from central banks in a number of countries – says the Central Bank.

It is pointed out that the y-o-y inflation trajectory turned downward since April and that, at 11.5% in August, it was somewhat lower than the current medium-term projection.

Narodna banka Srbije Beograd

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key policy rate

inflation in Serbia