Serbia Monetary Policy

Serbia

Serbia: NBS maintains policy rate at record low in July

July 9, 2015

At its 9 July monetary policy meeting, the Executive Board of the National Bank of Serbia (NBS) decided to keep the reference rate at 6.00%, which represents the lowest rate since the NBS introduced an inflation targeting mandate in 2006. The Bank has cut its main monetary policy rate by 200 basis points since March.

In its accompanying statement, the NBS stated that inflation remains below the Central Bank’s lower band of 4.0% plus/minus 1.5%, although it is expected to return to within the band in the coming months. The upward trend will be aided by the continued monetary easing that has been implemented by the Central Bank since March and the impact of an increase administered prices and higher commodity costs. That said, inflationary pressures will be limited due to weak domestic demand and low inflation abroad.

The Executive Board warned that, despite the fact that the ties of the Serbian and the Greek economies are relatively small, negative spillovers from the Greek crisis are likely to affect capital flows and the cost of debt servicing. The NBS’ next meeting is scheduled for 13 August.

FocusEconomics Consensus Forecast panelists expect the policy rate to end 2015 at 5.71%. For 2016, the panel sees the rate ending the year at 6.36%.


Author: Ricard Torné, Head of Economic Research

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Serbia Monetary Policy Chart


Serbia Monetary Policy July 2015 1

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


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