The Executive Board of the National Bank of Serbia decided at today’s meeting to keep the key policy rate at 5.75 percent, as well as to maintain the interest rates on deposit facilities (4.5 percent) and lending facilities (7.0 percent) at unchanged levels.
As stated in the official announcement, the Executive Board primarily took into account the realised and expected inflation in the coming period, as well as factors from the domestic and international environment that influence its movement.
“In line with the expectations of the Executive Board, year-on-year inflation continued to slow at the beginning of this year, falling to 2.4 percent in January. At the same time, compared with January last year, prices of food and non-alcoholic beverages were on average 1.0 percent lower. This price movement was largely influenced by the implementation of the Regulation on Special Conditions for the Trade of Certain Types of Goods, which limited trade margins in both wholesale and retail,” the NBS statement says.
Despite developments in the Middle East and the major international crisis, the National Bank of Serbia still expects inflation to remain within the target range of 3 ± 1.5 percent by the end of the year.
Furthermore, the measures of the National Bank of Serbia aimed at encouraging lending activity to citizens with lower incomes have been calibrated “so as not to trigger excessive credit growth, which could negatively affect price and financial stability.”
When it comes to developments in the international environment, the Executive Board emphasises that it continues to pursue a cautious monetary policy, primarily taking into account geopolitical tensions and the conflict in the Middle East and their impact on the rise in global prices of energy and other primary commodities, as well as on indicators of uncertainty.
“The scale and duration of this supply-side shock are difficult to predict, and therefore so are its effects on global inflation. What can already be assumed is that a significant increase in international crude oil prices will have a certain impact on the movement of petroleum product prices on the domestic market. Current global developments may also further affect supply chains, investment and consumer confidence, as well as flows of goods and capital that had already been under a certain degree of pressure even before the outbreak of the latest crisis due to the strengthening of protectionism in the world’s largest economies,” the NBS concludes.
Indirect but significant impact of the crisis in the Middle East
The monetary policy of the National Bank of Serbia is traditionally considered relatively conservative when it comes to managing interest rates. In recent years, Serbia’s central bank has pursued a policy primarily focused on preserving price stability and the stability of the dinar exchange rate, which often implies a more cautious approach to changes in the key policy rate.
Compared with some central banks in the region that have more flexible regimes or reacted more quickly to inflationary shocks, the NBS has often opted for more gradual adjustments to monetary policy. Such an approach stems from the structure of the Serbian economy, which is highly euroised and strongly connected with financial flows in the eurozone, meaning that sudden changes in interest rates can have a significant impact on lending activity, the stability of the banking sector and capital movements.
When it comes to reference benchmarks, the decisions of the National Bank of Serbia tend to follow the monetary policy of the European Central Bank more closely than the moves of central banks in regional countries that are not part of the eurozone. The reason for this is the fact that the majority of the banking system in Serbia is owned by banks from the European Union, as well as the fact that a large portion of savings and loans is linked to the euro.
Because of this financial structure, changes in interest rates in the eurozone strongly affect the domestic financial market, so in practice the NBS conducts a policy that is largely aligned with signals from Frankfurt, even though it formally retains full monetary autonomy.
Central banks in the region that have their own currencies also often look to the ECB as the main reference framework, so in practice monetary policies in south-eastern Europe frequently move in a similar direction.
Geopolitical shocks, such as the war in the Middle East, have an indirect but significant impact on interest rates around the world, primarily through rising energy prices and increased uncertainty in financial markets. If the conflict leads to a lasting increase in oil and gas prices, this could once again stimulate inflation at the global level, which could force central banks to maintain restrictive monetary policy for longer or even raise interest rates again.
(Biznis.rs, 12.03.2026)
https://biznis.rs/izdvajamo/narodna-banka-srbije-ipak-bez-promene-kamatnih-stopa/