Serbian Interest Rate Hike
February 9, 2023
Executive Board members at the National Bank of Serbia today authorized their 11th consecutive interest rate since April, but the 25-basis point size of the increase both today to 5.5% and at January’s policy review were only half the 50-bp size of the final four hikes done in 2022. Tightening began last April from a 1.0% level. Officials are now assessing “whether there is a need for additional tightening of monetary conditions and to what extent, while taking into account the expected effects of past monetary tightening on inflation going forward.” But at best, Serbian consumer price inflation has only crested at at a record 15.1% hit in November and matched in December. Officials aim to counter second-order cost-push pressures and to limit dinar depreciation. They are also counting on lower energy prices especially in the second half of 2023, which seems to be based upon wishful thinking that the war in Ukraine will subside.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: National Bank of Serbia
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