Serbia Monetary Policy December 2016


Serbia: NBS keeps policy rate unchanged in December

December 8, 2016

At its 8 December monetary policy meeting, the Executive Board of the National Bank of Serbia (NBS) decided to leave the reference rate unchanged at 4.00%, where it has been since 7 July. The rate stands at its lowest level since the NBS introduced an inflation targeting mandate in 2006.

The Central Bank explained in its brief press release that it based its decision on the latest inflation data and international developments. The Central Bank expects inflation to move within the target band of 1.5%-4% early next year as a result of an uptick in domestic demand and an increase in global oil prices. In contrast, the Bank stated that low food production costs will cause deflationary pressures for some time to come. The Central Bank highlighted the importance of caution in the conduct of monetary policy, due to the uncertainty in international financial and commodity markets. However, according to the Bank, following the successful implementation of structural reforms and fiscal consolidation measures the economy has become more resilient to economic shocks.

The next monetary policy meeting is scheduled for 12 January 2017.

FocusEconomics Consensus Forecast panelists expect the policy rate to end 2016 at 3.91%. For 2017, the panel sees the rate ending the year at 4.18%.

Author:, Economist

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Serbia Monetary Policy Chart

Serbia Monetary Policy December 2016

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

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