National Bank of Serbia Holds Key Interest Rate Steady Amid Cautious Monetary Policy

The Executive Board of the National Bank of Serbia (NBS) has decided to maintain its key interest rate. This decision reflects a continued cautious monetary policy approach, despite a significant decrease and subsequent stabilization of inflation throughout 2023 and into mid-2024. The NBS emphasizes that domestic inflation remains heavily dependent on global commodity and financial market developments, which continue to cause concern due to ongoing uncertainties. Factors influencing this decision include the impact of potential tariffs and trade policies on global economic growth, fluctuations in commodity prices, and potential disruptions to global supply chains. The European Central Bank's (ECB) recent easing of monetary policy, which should lead to more favorable conditions for euro-indexed borrowing in Serbia, was also considered. The Executive Board expects economic activity to accelerate in the coming year, supported by increased production of electric vehicles and automotive tires, new energy capacities, and infrastructure projects related to the Serbia Expo 2027 program. The next meeting to discuss economic trends and the key interest rate is scheduled for May 9, 2025.