Serbia Monetary Policy July 2021


Serbia: Central Bank stands pat in July

July 8, 2021

At its 8 July meeting, the Executive Board of the National Bank of Serbia left the key policy rate unchanged at its all-time low of 1.00%. This marked the sixth consecutive hold.

The decision was fueled by the Bank’s assessment that prior monetary and fiscal policy measures have supported economic activity and will continue to do so. Furthermore, a third stimulus package adopted by the government, worth around 4.3% of GDP, will be providing additional support. As such, the economy was one of the few across the globe to exceed pre-pandemic levels in the first quarter of this year. Turning to prices, a low base effect has pushed up inflationary pressures in recent months, but the Bank expects this to be somewhat transitory, projecting inflation to cool from the second quarter of next year as the impact of recent factors fades.

Looked ahead, the Bank reiterated its commitment to continue supporting price and financial stability while fostering stronger economic and employment growth. It will continue to keep a close eye on factors that could impact price levels domestically and abroad. Most of our panelists expect the Bank to hold the rate steady at 1.00% through to year-end.

The next meeting is scheduled for 12 August.

FocusEconomics panelists project the key policy rate to end 2021 at 1.07% and 2022 at 1.34%.

Author:, Economist

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Serbia Monetary Policy Chart

Serbia Monetary Policy July 2021

Note: NBS Reference Rate in %.
Source: National Bank of Serbia (NBS).

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