Serbia Monetary Policy December 2018


Serbia: National Bank of Serbia stands pat in December

December 6, 2018

On 6 December, 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 since April.

At its latest monetary policy meeting, the Bank judged its current monetary policy stance supportive of overall price stability, while also buttressing strong economic momentum. Inflation continued to remain comfortably within the target band of 1.5%–4.5% in October (October: 2.2%) and the NBS expects it to continue to move within the target band over the next two years. Moreover, the recent decline in global crude oil prices will factor favorably into the inflation outlook. Regarding the solid economic showing, the Bank referenced the effects of previous monetary policy easing and the investment impetus.

While the communiqué lacked clear forward guidance, the NBS continued to stress that downside risks to the economy stem primarily from the external backdrop. Most notably, the potential for capital outflows due to continued monetary tightening by the U.S. Federal Reserve, the winding down of quantitative easing by the ECB and possible negative spillovers from the U.S.-China trade dispute threaten the outlook.

The next monetary policy meeting is scheduled for 10 January.

Nearly all FocusEconomics Consensus Forecast panelists see the Bank raising rates at least once by the end of next year, in response to tighter monetary policy in key economies. FocusEconomics Consensus Forecast panelists expect the key policy rate to end 2019 at 3.31% and 2020 at 3.79%.


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Serbia Monetary Policy Chart

Serbia Monetary Policy December 2018

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

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