Serbian town in the winter

Serbia Monetary Policy November 2018

Serbia: National Bank of Serbia leaves rates on hold in November

At its 8 November monetary policy meeting, the Executive Board of the National Bank of Serbia (NBS) voted to keep the key policy rate steady at 3.00%, where it has now been for eight months.

The Bank’s decision was mainly guided by overall price stability, despite strong economic momentum. Inflation continued to remain comfortably within the target band of 1.5%–4.5% in October and has since April this year. Moreover, inflation expectations remain well-anchored as the NBS expects it to continue to fluctuate within the target band over the next two years. The economy meanwhile is set for one of the best performances in a decade, on the back of robust investment, which has been supported by favorable financial conditions and strong credit growth, and also in part thanks to past monetary policy easing.

While the NBS did not present clear forward guidance in its communiqué, it noted downside risks from the external backdrop, including capital outflows due to monetary policy normalization in advanced economies, rising trade protectionism, and investors exercising caution amid uncertainty in financial markets.

The November Inflation Report will be published by the Central Bank on 16 November and will provide greater detail on its current monetary policy stance and the macroeconomic picture.

The next monetary policy meeting is scheduled for 6 December.

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