NBS keeps key policy rate at 5.75 pct

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

"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.

As underscored by the Board, although inflation has returned within the target tolerance band and continues to move therein, a cautious monetary policy stance is necessary given the uncertainty in the international environment, notably heightened geopolitical tensions and their potential impact on macroeconomic developments.

Monetary policy caution is also mandated by the unpredictable global macroeconomic situation that may impact the global prices of energy and other primary commodities.

Although the global crude oil price flatlined since mid-October, owing primarily to the expected weak demand for oil, solid inventories and rising US manufacturing output, its future movement remains uncertain," the NBS said in a statement.