National Bank of Serbia

March 14, 2018

Serbia’s central bank policy rate was sliced today to 3.25% from 3.50%. The rate previously had been reduced by 275 basis points during the final 8 months of 2013, by 150 bps in 2014, 350 bps in 2015, and 50 bps each in 2016 and 2017 but not since last October. This additional easing after five months of elapsed time was justified in a released statement by a drop of consumer price inflation last month to 1.5% overall and 1.3% core, plus anchored inflation expectations and the belief that inflation in the very near term is apt to soften further because of base effects. Officials do not expect inflation to recenter itself in the middle of the target range (3%) until the middle of 2019 but recognize the existence of upside international risk factors such as the possibility of higher world commodity prices.

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



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