Serbian town in the winter

Serbia Monetary Policy February 2018

Serbia: NBS stands pat in February for the fourth consecutive month

At its 8 February monetary policy meeting, the Executive Board of the National Bank of Serbia (NBS) maintained its key policy rate at 3.50% for the fourth consecutive month. In making its decision—which was in line with market expectations—the NBS took into account its latest inflation expectations and the expected effects of past monetary policy easing.

The NBS kept the key policy rate at 3.50% to support economic growth and ensure that inflation remains within its target range of 3.0% plus or minus 1.5 percentage points. Inflation accelerated from 2.8% in November to 3.0% in December—hitting the midpoint of the target range—while core inflation notably slowed from 1.4% to 1.3%. Inflation is expected to face downward pressure early this year because of a negative base effect. However, upward pressures this year are expected due to a strong domestic economy and higher disposable incomes, boosted by a higher minimum wage rate and a lower income tax burden.

There was little indication in the NBS’s post-meeting communiqué on the direction of future monetary policy moves. It did note, however, that commodity price uncertainty remains a reason for caution—oil prices, for example, have picked up in recent months—as does uncertainty about monetary policy changes from leading central banks. But, with inflation expected to be slightly below the NBS’s target midpoint in the short term, and core inflation weakening in December, the NBS is unlikely to take a particularly hawkish stance at its next monetary policy meeting on 8 March. Nevertheless, several of our panelists expect a key policy rate rise by the end of this year.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest