Serbian central bank keeps key repo rate unchanged at 11.75%

By bne IntelliNews April 12, 2013

Serbia's central bank (NBS) left its one-week repo rate unchanged at 11.75% on Thursday, April 11, for a second consecutive month citing subdued inflation which will likely return within the bank’s target band of 2.5-5.5% by end-2013, the NBS stated. The bank underscored its efficient monetary measures saying that monthly inflation has remained low over the past four months.

The on-hold rate decision was expected as the NBS recently said it might alter its monetary policy stance as inflationary pressures stemming from food and regulated prices eased. Serb policy makers also pledged a more accommodative monetary policy in order to stimulate growth. Since June 2012, the NBS has increased its key repo rate eight times by 225 basis points. The monetary policy tightening, seeking to cut inflation, has, however, weighed on the real sector borrowing costs and growth prospects as the Serbian economy struggles to recover after contracting 1.7% in 2012.

The NBS said that further monetary easing will depend on the results from fiscal consolidation as well as on global financial markets and growth outlook of Serbia’s main trade partners.

Serbia’s annual inflation eased to 12.4% in February from 12.8% the month before due to slower food and transport price growth. The onset of the new agricultural season will likely help lower food prices further over the coming months. The statistics office will publish data on the CPI in March on Friday, April 12.

The next rate-setting meeting of the NBS’ Executive Board will be held on May 13.

Related Articles

Freedom House keeps “partly free” status for Macedonia despite new government’s efforts

Macedonia was rated only “partly free” in the latest report from international watchdog Freedom House, the same almost all of the six Western Balkan countries, despite efforts by the ... more

Former Belgrade airport chief arrested in corruption probe

A former head of Belgrade’s Airport Nikola Tesla (ANT) — identified only by the initials V. R. — has been arrested as part of a corruption investigation, the Ministry of Interior Affairs (MUP) ... more

Southeast Europe's biggest synthetic drugs lab found in Macedonia

Macedonia’s Public Prosecutor's Office said on December 1 it has discovered the biggest laboratory producing synthetic drugs in Southeast Europe in the northwestern city of Tetovo. The lab, ... more