National Bank of Serbia
October 9, 2017
In cutting Serbia’s monetary policy interest rate to 3.5% from 4.0%, the Executive Board of the National Bank of Serbia claimed to be “guided by the medium-term inflation projection and movements in key inflation factors.” The medium-term inflation target is 3.0%, give or take 1.5 percentage points, and the most recent on-year changes of total and core CPI are 2.5% and 1.5%. A released statement contains several reasons why officials expect in-target inflation to persist. Starting at 12.25%, the key interest rate was reduced by 275 basis points during the final nine months of 2013, 150 basis points in 2014, 350 bps in 2015 and 25 basis points each in February and July of 2016. Today’s reduction is the first change since the one in July 2016.
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