At its meeting today, the National Bank of Serbia’s Executive Board decided to ease monetary policy further and reduce the benchmark interest rate by 25 basis points, to 1%.
“With this decision, the Executive Board is giving additional support to the domestic economy, having in mind the scale of the pandemic-induced crisis worldwide, worsening of the epidemiological situation and economic slowdown globally, and especially in Europe,” the Bank has said on its website.
After this cut, the benchmark interest rate will be 1.25 percentage points lower than before the pandemic.
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At the same time, the NBS decided to narrow the benchmark interest rate corridor, from ±1.0 percentage point to ±0.9 percentage points relative to the benchmark interest rate, whereby the deposit facility rate was reduced by 15 basis points, to 0.1%, and the lending facilities rate by 35 basis points, to 1.9%.
“We expect that the maintained positive medium-term outlook of our country and the measures devised by the government and the National Bank of Serbia will contribute to the recovery of domestic demand, which, with further normalization of external demand, will influence the recovery of our economy next year, which will be around 6%,” the NBS added.
The NBS also said that the inflation rate in Serbia has remained firmly under control, as it has been for the past seven years. Inflation in October remained at the September level of 1.8%, in line with the National Bank of Serbia’s expectations.
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