Serbia Interest Rate

The central bank of Serbia maintained its key interest rate at 5.75% during its December 2024 meeting, highlighting the continued impact of earlier rate cuts totaling 75bps in June and September. Policymakers noted that while inflation has returned to the target range and is expected to remain stable, a prudent monetary policy stance is necessary. This approach reflects the persistent uncertainty in the global environment, driven largely by geopolitical tensions and their potential impact on macroeconomic stability. Inflation in Serbia was at 4.3% in November, remaining within the central bank target of 3 ± 1.5% for a seventh straight month.

The National Bank of Serbia maintained its key policy rate at 5.75% in November 2024, marking a second consecutive meeting without a change. This decision follows previous rate cuts totaling 75 basis points since June, with anticipated effects still unfolding. Although inflation stabilized within the target range (3 ± 1.5%) and eased to 4.2% in September, inflationary pressures persist due to rising energy costs, regulatory factors, global uncertainties, and heightened geopolitical risks. Moreover, inflation is further influenced by favorable credit growth (6.6% YoY in September), supported by recent monetary policy easing. Meanwhile, a resilient banking sector, declining public debt, and strong GDP growth (3.1% YoY in Q3) underscore a positive economic outlook. Additionally, Standard & Poor's recent upgrade of Serbia’s credit rating to investment grade is expected to improve financing conditions, fostering continued growth

The central bank of Serbia kept the key policy rate steady at 5.75% during its October 2024 meeting, following a 25bps cut in September that was the third reduction this year. The deposit and lending facility rates were also kept at 4.5% and 7.0%, respectively. Policymakers noted that the key policy rate has been cut by 75 bps in total since June and that the effects of past monetary policy easing will play out in the coming period. Although inflation has returned within the target range and continues to move therein, caution is warranted due to the uncertain international economic landscape and mounting geopolitical risks, including their impact on the global prices of energy and other primary commodities.