NBS cuts key policy rate by 0.25 pct to 5.75 pct

BELGRADE - The National Bank of Serbia (NBS) Executive Board decided on Thursday in favour of further monetary easing, cutting the key policy rate by 25 bp to 5.75 pct, the central bank announced.

"The rates on deposit and lending facilities were also lowered – to 4.5 pct and 7 pct, respectively," the NBS said in a statement.

"The Board was guided by the fact that inflation has been hovering within the target tolerance band (3±1.5 pct) since May, is likely to stay there until the end of the projection horizon and decline further towards the midpoint.

Taking into account the actual and expected movement of key inflation factors, notably further alleviation of global inflationary pressures and the disinflationary effect of restrictive monetary measures so far, the Board concluded that conditions are in place to proceed with monetary easing by cutting the key policy rate.

As assessed by the Board, monetary policy remains tight despite the initiated easing. Looking ahead, the NBS will maintain a cautious approach to monetary policy relaxation and will base its decisions on the incoming inflation and macroeconomic data," it said.