Serbia Monetary Policy June 2019


Serbia: NBS maintains holding pattern in June

June 6, 2019

At its 6 June monetary policy meeting, the executive board of the National Bank of Serbia (NBS) voted to keep the key policy rate unchanged at 3.00%, where it has been for over one year.

The Bank continued to deem its current monetary stance appropriate, guided by well-anchored inflation. Inflation rose to 3.1% in April, a notch above the midpoint of the Bank’s tolerance band of 3.0% plus or minus 1.5 percentage points, and the NBS expects it to continue to remain low and stable this year and next.

The Bank maintained its cautious rhetoric in the communiqué, citing external risks stemming from volatility in commodity and financial markets, the escalation of trade tensions and lingering risks of capital outflows. Nevertheless, the Bank remained upbeat about Serbia’s increased resilience to economic shocks thanks to its stronger fiscal stance and adequate coverage of the current account deficit in FDI inflows. A more dovish Federal Reserve and ECB should give the NBS room to gradually tighten rates.

The next monetary policy meeting will be held on 11 July.

Against this backdrop, the majority of FocusEconomics Consensus Forecast panelists see the Bank holding the key policy rate steady through 2019 and then tightening gradually thereafter in 2020. Our panelists expect the key policy rate to end 2019 at 3.04% and 2020 at 3.48%.


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Serbia Monetary Policy Chart

Serbia Monetary Policy June 2019

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

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