Interest Rate in Serbia
Serbia - Interest Rate
Central Bank holds policy rate in November
At its 9 November meeting, the National Bank of Serbia (NBS) left the key policy rate unchanged at its all-time low of 1.00%. The decision marked the 10th consecutive hold, and was in line with market analysts’ expectations. However, the Bank continued to tighten financial conditions by targeting the repo rate and withdrawing excess liquidity from the banking sector.
In deliberating its decision to hold the main monetary policy tool unchanged, the Bank said that it expects the recent rise in inflation to “be temporary in character” and the factors pushing up prices “will dissipate next year”. It anticipates inflation to slow particularly in Q2 2022. Moreover, the Bank noted that the positive effects of prior large-scale monetary and fiscal support measures—including the third support package—would continue going forward, allowing it to take a wait-and-see approach.
While the NBS reiterated that it “will keep a close eye on developments in the domestic and international environment” and that it “stands ready to respond promptly”, the press release suggested that the policy rate will likely only be raised when there is room to do so. The majority of our panelists expect the Bank to hold the policy rate at 1.00% at its final meeting of the year, scheduled for 9 December, before embarking on a tightening cycle next year.
Mate Jelic, analyst at Erste Group, commented:
“The outlook regarding interest rates remains rather blurry. Should inflation pressures ease in 2022 the impetus to hike begins to fade, but on the other hand, above target headline inflation for a protracted period can build into future inflation expectations, and thus quickly spillover into real sector developments.”
FocusEconomics panelists project the key policy rate to end 2022 at 1.54% and 2023 at 2.00%.
Serbia - Interest Rate Data
|Policy Interest Rate (%)||4.50||4.00||3.50||3.00||2.25|
5 years of economic forecasts for more than 30 economic indicators.
Serbia Interest Rate Chart
Source: National Bank of Serbia
|Bond Yield||3.05||0.0 %||Dec 31|
|Exchange Rate||104.9||-0.31 %||Jan 01|
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November 12, 2021
Consumer prices rose 0.94% in October over the previous month, picking up from the 0.78% rise recorded in September.
November 9, 2021
At its 9 November meeting, the National Bank of Serbia (NBS) left the key policy rate unchanged at its all-time low of 1.00%.
October 29, 2021
Industrial output increased 1.4% compared to the same month of the previous year in September, which was above August's 0.1% increase.
October 12, 2021
Consumer prices rose 0.78% in September over the previous month, slowing down from August's 0.88% rise.
Serbia: Central Bank holds policy rate in October, but takes first step towards policy normalization
October 7, 2021
The National Bank of Serbia (NBS) left the key policy rate unchanged at its all-time low of 1.00% at its 7 October meeting.