National Bank of Serbia

May 10, 2018

Serbian monetary officials already had cut their policy interest rate by 50 basis points this year via two 25-bp moves in March and April. The half-percentage point reduction this year matched the total annual declines engineered in both 2016 and 2017 and followed a combined 500 bps in 2014-15 and 275 bps in the final eight months of 2013. And yet April saw inflation hit a new low. But with so much stimulus in the pipeline, officials kept policy unchanged at this month’s review and released a statement that projects a gradual acceleration of inflation toward the target floor by late-2018 and the target midpoint of 3% sometime in the second half of 2019. Higher oil prices could expedite this process.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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