NBS Raises Key Policy Rate to 5%

At its meeting today, the NBS Executive Board voted to raise the key policy rate by 50 bp, to 5%. It raised by the same amount the rate on deposit facilities – to 4%, and the rate on lending facilities – to 6%, the National Bank of Serbia (NBS) says in its press release.

As said in the explanation, by making this decision, the NBS continues to tighten monetary conditions and contain the second-round effects of rising prices through inflation expectations, thus aiding inflation in Serbia to strike a downward trajectory and return within the target tolerance band until the end of the projection horizon.

– Today’s rate hike is the ninth in a row – since April 2022, it has been raised by total 400 bp. The spillover of the effects of past monetary policy tightening onto the rates in the markets of money, loans and savings suggests the efficiency of the transmission mechanism through the interest rate channel – the NBS says.