Central Bank Rate Cut of 50 Basis Points in Serbia

March 12, 2020

The National Bank of Serbia’s key policy rate was cut 50 basis points to 1.75% earlier today. A statement from the central bank’s Executive Board justifies the reduction as a “timely and adequate response to heightened uncertainty in the international environment triggered by the spread of Covid-19” and observes that several influential central banks like the Federal Reserve, Bank of Canada, Reserve Bank of Australia, and Bank of England have also loosened their monetary policies. Explicit mention is also made that the ECB no doubt will be doing so later today. The policy rate was last cut in November. At 1.75%, it now becomes half the 3.5% level at the start of 2018 and far below a peak of 11.75% reached briefly from February to May of 2013. Serbian inflation of 2.0% (core 1.0%) is manageable.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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