National Bank of Serbia

December 8, 2016

Serbia’s key monetary policy interest rate was left at 4.0%, its level since a 25-basis point reduction in July. A statement released by the National Bank of Serbia reiterated several factors mentioned after the prior meeting last month for why inflation is likely to firm into the 1.5-4.5% target range by early 2017. But in addition, this month’s communication mentions persistent uncertainties partly related to divergent monetary policies in the United States and Europe and how such might impact capital flows. There was extensive by Serbia’s central bank starting in the spring of 2013. In April that year, the interest rate was at 12.25%. By end-2014, such was at 8%, and the end-2015 level was 4.5%. Prior to this year’s last cut in July, there was also a 25-bp reduction made in February.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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