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Serbia, Romania c-banks to keep key rates flat this week - Erste

Author Radomir Ralev
Serbia, Romania c-banks to keep key rates flat this week - Erste By NMedjedov (Own work), via Wikimedia Commons

BELGRADE (Serbia), November 4 (SeeNews) - Erste expects the central banks of Romania and Serbia to keep the key repo rates unchanged at their rate-setting board meetings this week, the Austria-based banking group said on Monday.

"The most interesting meeting will be in Serbia, as the call is likely to be close. We lean towards a stability of rates scenario, due to the elevated external uncertainty, but acknowledge that the visible undershooting of inflation could lead to a rate cut down the road," Erste said in a report on the countries in Central and Eastern Europe (CEE).

The central banks of Romania and Serbia will hold their next rate-setting meetings on November 6 and 7, respectively.

In Romania, there is a broad consensus that the central bank will leave the policy rate flat, Erste said.

"Apart from that, we expect to see solid retail and industry data for September across the region that will complete the picture of the economic performance in the third quarter."

Fitch will publish a country rating report on Romania on Friday and is expected to keep the country's BBB- sovereign rating unchanged, Erste said.

Serbia's central bank last cut the key repo rate by 0.25 percentage point to 2.75% in July and to 2.5% in August to help guide inflation to the target band.

The Romanian central bank last changed its key rate in May last year, increasing it to 2.50% from 2.25%.

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