National Bank of Serbia

July 10, 2014

Although the policy interest rate was left unchanged at 8.5%, a mostly dovish statement was released that projected inflation hovering near the bottom of the target range, observed a stable exchange rate, and spoke of a bleaker growth prognosis in part related to the impact of flooding.  The key central bank rate had been reduced from 11.75% to 9.5% in the final eight months of 2013 and was cut further by 50 basis points each in May and June of this year.  Policy paused this month because of “still present, though less pronounced, risks relating to liquidity levels in the international capital markets.”  The August policy meeting will be held on 7th.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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