Serbian central bank keeps key policy rate flat at 8.5%.

By bne IntelliNews April 21, 2010
The National Bank of Serbia (NBS) Monetary Board decided to keep the key policy rate unchanged at 8.5%, the central bank said in a statement. The NBS did not elaborate on the move, but such a decision was likely, given that the rate has been previously cut by a cumulative 100bps in less then a month. As recalled, the NBS has slashed the key repo rate by 50bps earlier in the month, after already cutting it by another 50bps late in March, following the resignation of central bank governor Radovan Jelasic. The central bank cited low inflation and low aggregate demand as reasons for the move. However, the inflation accelerated in March on the back of strong growth in regulated prices. Despite the upturn in March, annual inflation stayed below the lower end of the NBS's target for the month. Disinflationary trends are expected by the end of 2010, but main upside risk stems from rising oil prices and passes through effect of dinar depreciation on prices. 

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