Serbian town in the winter

Serbia Monetary Policy September 2023

Serbia: Central Bank holds rates in September, raises reserve requirements

At its 7 September meeting, the National Bank of Serbia (NBS) held its key policy rate at 6.50%. It also kept the deposit and lending facility rates unchanged at 5.25% and 7.75%, respectively. The decision marked the second consecutive hold and was in line with market expectations.

The Bank’s decision to hold fire was driven by the ongoing disinflationary process in the country, stemming from lower global commodity prices, healthier supply chains and past interest rate hikes, according to the NBS. Additionally, the Bank believes that the full effect of earlier rate hikes has yet to fully materialize. Nonetheless, the NBS did raise reserve requirements to drain excess dinar liquidity.

Going forward, the NBS did not close the door on additional monetary tightening and stated that it would keep a close eye on the inflation outlook, while trying to maintain financial stability and support economic growth.

The next meeting is scheduled for 6 October.

Mate Jelic, analyst at Erste Bank, commented on the outlook:

“In our view, the NBS will keep the key rate unchanged at 6.5% until the end of the year. The already conducted monetary contraction has slowed credit growth, while deposit growth remains stable, thus acting in a disinflationary manner. A large chunk of inflation is still imported; hence, possible new hikes of the key rate would have little effect on headline inflation. Additionally, the remaining dinar liquidity surplus will continuously be mopped up through regular reverse repo operations, thus limiting possible inflationary pressures.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest