Serbia's c-bank to abstain from tightening in the short term - Erste

Serbia's c-bank to abstain from tightening in the short term - Erste Author: SeeNews. License: All rights reserved.

BELGRADE (Serbia), March 12 (SeeNews) - Erste Group said on Monday it expects Serbia's central bank to keep its macroprudential stance with no tightening foreseen in the short run. 

The central bank is not expected to tighten because as most financial stability indicators improved recently and lending activity in Serbia has only started to recover, Erste Group said in a Central and Eastern Europe Insights report.

"At the moment, we do not see signs of overheating or bubble creation across the sectors," Erste Group said.

The macroprudential framework was initially set out in 2015 and in June 2017 Basel III standards were incorporated into national laws, Erste Group recalled.

"As the most important instruments, we would point out the countercyclical capital buffer, the capital buffer for systemically important banks, the capital conservation buffer and the systemic risk buffer (instruments are mostly based on the Basel III framework)."

Serbia's central bank said last week it postponed its key repo rate-setting policy meeting to March 14 from March 8, due to duties of members of its executive board.

In February, the NBS kept its key repo rate unchanged at 3.5%. The central bank cut the key repo rate by 0.25 of a percentage point to 3.75% in September and to 3.5% in October to help guide inflation to the target band.

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