NBS keeps key policy rate on hold

BELGRADE - The National Bank of Serbia (NBS) Executive Board decided on Thursday to keep the key policy rate at 5.75 pct and the rates on deposit and lending facilities at 4.5 pct and 7.0 pct, respectively.

"In making the decision, the Board highlighted that the key policy rate has been cut by 75 bp in total since June and that the effects of past monetary policy easing will play out in the coming period as well," the central bank said in a statement.

"As noted by the Board, although inflation has returned to within the target tolerance band and continues to move therein, monetary policy caution by the NBS is mandated by the unpredictability of macroeconomic developments in the international environment and mounting geopolitical risks, including their impact on the global prices of energy and other primary commodities.

The global crude oil price hikes so far have been contained owing primarily to ample supply and substantial inventories.

However, there is pronounced concern over the potential detrimental impact of further escalation of the Middle East conflict on oil flows from this key export region, which may fuel global oil prices in the period to come.

This may reflect on global inflation, the pace of monetary easing by leading central banks and global financial conditions," it also said.