Serbia Central Bank Leaves Rate Unchanged For Sixth Time

(RTTNews) - The National Bank of Serbia on Thursday kept the key interest rate unchanged for the sixth policy session in a row, citing an easing trend in inflationary pressures.

The NBS Executive Board, led by Governor Jorgovanka Tabakovic, decided to hold the key policy rate steady at 6.50 percent, as expected. The rate has been at this level since July last year. "The decision was motivated by further dissipation of global inflationary pressures, the downward trajectory of inflation at home and its expected return within the target tolerance band by mid-2024," the bank said. Policymakers expect inflation, which fell to 7.6 percent in December, to slow further and return within the target tolerance band around mid-year, coming close to the 3% target at end-2024. Monetary tightening, slowdown in imported inflation and the anticipated continued decline in inflation expectations will underpin the easing in inflation, the bank said.

Official estimates showed that Serbia's GDP grew 2.5 percent in 2023. The NBS expects GDP growth to pick up to 3.0-4.0 percent this year, driven by personal consumption and investments. The next rate-setting session is on February 8.