Rate Cut by National Bank of Serbia

November 13, 2014

After cutting their policy interest rate by 50 basis points for a third time in the half year since May, Serbian monetary officials released a statement that essentially made two points.  First, inflation has been below target for the past eight months and is likely to remain subdued amid persistent disinflationary forces.  Secondly, the risk from external factors is perceived to be lessening.

The Executive Board expects that the initiated implementation of fiscal consolidation measures and structural reforms will moderate the negative impact of external factors stemming from uncertainties over monetary policy moves of the world’s major economies. The Executive Board judges that the expected conclusion of an arrangement with the IMF will provide an additional assurance of the credibility of Serbia’s economic policy.

Serbia’s key policy rate, which had been at 9.5% from December 2013 until mid-May 2014, now falls to 8.0%.

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



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