Serbia Monetary Policy March 2019


Serbia: NBS stands pat in March

March 7, 2019

At its 7 March monetary policy meeting, the Executive Board of the National Bank of Serbia (NBS) voted to keep the key policy rate steady at 3.00%, where it has been since April 2018.

Sustained price stability was the main factor behind the Bank’s latest move to keep the key policy rate unchanged in March. Inflation, which has been low and stable over the past six years, came in at 2.1% in January, which was well within the Bank’s tolerance band of 1.5%–4.5%. Moreover, the NBS continues to see inflation fluctuating within the lower half of the band in the year ahead.

The Bank noted that slower global growth is expected to moderate the pace of policy normalization from the Federal Reserve and the ECB. Nevertheless, the NBS remained cautious about the potential secondary effect of capital outflows from monetary tightening in major economies. At the same time, the Bank pointed to Serbia’s improved fiscal stance, with the country posting its second fiscal surplus in 2018, and a stable current account deficit despite strong imports for investment projects, as reflective of the economy’s better position to withstand external shocks.

The next monetary policy meeting will be held on 9 April.

Serbia Interest Rate Forecast

Nearly all FocusEconomics Consensus Forecast panelists see the Bank holding the key policy rate steady through H1 2019 and then tightening gradually thereafter. Our panelists expect the key policy rate to end 2019 at 3.19% and 2020 at 3.70%.


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Serbia Monetary Policy Chart

Serbia Monetary Policy March 2019

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

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