July 7 (SeeNews) - Serbia's central bank said on Thursday it decided to increase its key repo rate by 25 basis points to 2.75% amid inflationary pressures.
The central bank also decided to set the deposit facility rate at 1.75% and the lending facility rate at 3.75%, it said in a statement.
Inflationary pressures on the global and domestic markets proved to be stronger and more persisting than previously expected, the central bank noted, adding that the trend requires further tightening of monetary policy.
The latest data published by the national statistical office showed that Serbia's consumer prices increased by 10.4% year-on-year in May, after rising by 9.6% the month before.
Inflation should return to the target band of 3±1.5% in the second half of next year which will be aided by the current stricter monetary policy, the central bank said.
It added that the tightening of the monetary conditions of the Federal Reserve and the European Central Bank and increased uncertainty at the global level could negatively affect capital flows to emerging countries, including Serbia.
The central bank will hold its next rate-setting meeting on August 11.