National Bank of Serbia Hikes Interest Rate Further
July 13, 2023
Central bank watchers were surprised by a 25-basis point hike in the National Bank of Serbia’s policy interest rate to 6.5%. A pause in the cycle of rate increases had occurred in May, but with today’s sixth 25-basis point hike of 2023, the key rate becomes 6.5% versus a pandemic low of 1.0% that prevailed from December 2020 until April 2022. Serbian CPI inflation has slowed from a record high of 16.2% in March to 13.7% by June, but according to a released statement from the NBS,
The Executive Board believes that continued moderate tightening of monetary policy is still necessary given that inflation at the global level is showing signs of greater resilience than anticipated. Though inflation is gradually declining in many countries, it is still relatively high. Caution is also mandated by core inflation, which is receding at a slower pace than headline in many countries, due to the elevated inflation expectations and labour market factors, most of all further wage growth. This means that the struggle of central banks with inflation is not yet over and that an increase in policy rates of the world’s leading central banks can be expected in the coming period as well.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: National Bank of Serbia
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