Serbia Monetary Policy


Serbia: NBS keeps its policy rate unchanged in November

November 12, 2015

At its 12 November monetary policy meeting, the Executive Board of the National Bank of Serbia (NBS) decided to keep the reference rate unchanged at 4.50%. The rate is at the lowest level it has been since the NBS introduced an inflation targeting mandate in 2006. The NBS had cut its reference rate by 50 basis points at its previous meeting in October. The next monetary meeting is scheduled for 10 December.

In its brief accompanying statement, the NBS commented that inflationary pressures remain subdued reflecting low commodity prices, a low inflation environment abroad and a stable exchange rate. As a result, inflation remains below the lower band of the Central Bank’s target of 4.0% plus/minus 1.5 percentage points. The Bank projects that inflation will return to within the target range in early-2016 as the base effect of lower oil prices starts to wane.

The Bank acknowledged that an increase in the U.S. federal funds rate could have a negative impact on the liquidity in the international capital market, which in turn will cause capital outflows in emerging markets. However, the NBS assessed that, “the resilience of the Serbian economy to the above external risks is bolstered by the effects of fiscal consolidation measures, better-than-anticipated growth prospects, reduced external imbalance and consistent implementation of the arrangement with the International Monetary Fund.”

FocusEconomics Consensus Forecast panelists expect the policy rate to end 2015 at 4.50%. For 2016, the panel sees the rate ending the year at 5.54%.

Author:, Senior Economist

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Serbia Monetary Policy Chart

Serbia Monetary Policy November 2015

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

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