Serbia Monetary Policy November 2022

Serbia

Serbia: Central Bank continues its hiking cycle in November

November 10, 2022

The National Bank of Serbia (NBS) hiked the key policy rate by 50 basis points to 4.50% from 4.00% at its 10 November meeting. The Bank also raised the deposit and credit facilities by 50 basis points each to 3.00% and 5.00%, respectively.

The decision was driven by “the continued rise in cost-push pressures and inflation, reflecting primarily import price growth”. Moreover, the Bank targeted second-round effects by tightening financial conditions to limit inflation expectations. Simultaneously, the Bank’s noted that stronger and longer-lasting inflationary pressures contributed to its decision. The NBS expects domestic inflation to fall sharply in the second half of next year and to return to the target range by the end of the forecast horizon.

The NBS did not explicitly indicate the direction of future monetary policy moves. The Bank stated that it “will assess if there is a need for further monetary tightening” amid the backdrop of the war in Ukraine, as well as the movement of major monetary and macroeconomic factors domestically and abroad. Our panelists anticipate that the NBS will ease monetary policy next year.

The next meeting is scheduled for 8 December.

The NBS did not explicitly indicate the direction of future monetary policy moves. The Bank stated that it “will assess if there is a need for further monetary tightening” amid the backdrop of the war in Ukraine, as well as the movement of major monetary and macroeconomic factors domestically and abroad. Our panelists anticipate that the NBS will ease monetary policy next year.

The next meeting is scheduled for 8 December.

FocusEconomics panelists project the key policy rate to end 2023 at 4.63% and 2024 at 4.17%.


Author:, Economist

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