The National Bank of Serbia (NBS) raised its benchmark interest rate to three percent on Thursday.
“At its meeting today, the NBS Executive Board voted to raise the benchmark interest rate by 25 basic points (bp) to 3%. At the same time, the lending facility rate now equals 4% and the deposit facility rate 2%, meaning that the entire interest rates corridor was increased by 25 bp,” a press release said.
It said that the decision was made to maintain the continuity of “moderate monetary policy tightening”, adding that the NBS Executive Board feels that monetary conditions have to be even stricter.
Year-on-year inflation in Serbia amounted to 11.9% year-on-year in June, of which about 70 percent relates to the increase in food and energy prices. The growth of imported inflation was also reflected in the growth of base inflation (total inflation excluding the prices of food, energy, alcohol and cigarettes), which amounted to 6.7 percent year-on-year in June.
NBS also say that it is important to point out that base inflation is still significantly lower than total inflation, but lower than base inflation in the countries of the region with the same monetary policy regime.
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