National Bank of Serbia

January 12, 2016

Beginning last March, Serbia’s key monetary policy interest rate was reduced after 7 of 8 consecutive monthly Executive Board meetings.  The exception was July’s meeting, and the cumulative decline lowered the rate to 4.5% from 8.0%.  As in November and December, officials declined to change their policy at the first meeting of 2016, so such remains at 4.5%.  A released statement predicts that Serbian inflation will remain below target until some time in the second half of this year, and officials identify the presence of strong geopolitical tensions, financial market turbulence, and a slowdown of unknown extent in the Chinese economy as justification for caution in monetary policymaking by them.  This is followed by reassuring words that Serbia can handle these uncertainties.

However, progress in fiscal consolidation, sustainability of public finances, improvement in the business and investment environment and the narrowing of external imbalances have greatly contributed to increasing domestic economy’s resilience to risks in the international environment.

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



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