The National Bank of Serbia (NBS) on Thursday raised its benchmark interest rate to 3%.
“At its meeting today, the SNB Executive Board voted to increase the benchmark interest rate by 25 basis points (bps) to 3%. At the same time, the lending facility rate is now equal to 4% and the deposit facility rate to 2%, which means that the entire interest rate corridor has been increased by 25 points base,” a statement read.
He said the decision had been taken to maintain the continuity of a “moderate tightening of monetary policy”, adding that the SNB board believes that monetary conditions need to be even tighter.
Year-on-year inflation in Serbia amounted to 11.9% year-on-year in June, around 70% of which is linked to rising food and energy prices. The growth in imported inflation was also reflected in the growth in core inflation (total inflation excluding the price of food, energy, alcohol and cigarettes), which stood at 6.7% YoY in June.
The SNB also indicates that it is important to point out that core inflation is still significantly lower than headline inflation, but lower than core inflation in countries in the region with the same monetary policy regime.
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