NBS keeps key policy rate at 8.5 percent

BELGRADE - The Executive Board of the National Bank of Serbia (NBS) voted to retain its key policy rate at 8.5 percent, assessing that risks stemming from the domestic and international environment call for further caution in the pursuance of monetary.

At its meeting on Thursday, the NBS Executive Board said that the current geopolitical tensions, including the expected further monetary tightening by the Fed, may adversely affect capital inflows into countries of the region, including Serbia, according to a release from the NBS Governor's Office on the same day.

Moderate growth in the country's risk premium and depreciation pressures, prevailing in almost all countries of the region over the past several months, are indicative of reduced appetite of foreign investors.

"The Executive Board expects that the adoption and consistent implementation of fiscal consolidation measures and structural reforms will affect positively the foreign investors' perception of Serbia, which may strengthen resilience to the above external risks and positively affect the country's risk premium in the coming period," the release said.

The release also noted that year-on-year inflation was gradually returning towards the target of four percent plus or minus 1.5 percentage points and that it equalled 2.1 percent in September.

Photo Tanjug/M. Jelesijevic (archive)