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Serbia's c-bank to hold key rate unchanged this week - Erste

Author Radomir Ralev
Serbia's c-bank to hold key rate unchanged this week - Erste Author: SeeNews. License: All rights reserved.

BELGRADE (Serbia), April 10 (SeeNews) - Erste Group expects Serbia's central bank, NBS, to keep its key repo rate unchanged at 3.25% at its monetary policy meeting on April 12, the Austria-based banking group said.

This week, the outcome of the NBS meeting should be neutral for the FX market, as no change in the policy rate is expected, Erste said in a weekly insights report on the countries in Central and Eastern Europe (CEE) published on Monday.

Appreciation pressure prompted the central bank to intervene on the FX market last week, buying a total of 30 million euro ($37 million) from commercial banks, while this week, the meeting and rates staying on hold should be neutral for the market, Erste said.

NBS said in March it decided to cut its key repo rate to 3.25% from 3.50%, based on inflation projections for the coming period. Inflation is expected to keep slowing down in the coming months but to gradually approach the middle of the 1.5%-4.5% target band by the end of 2019, NBS said.

The NBS could adopt a modestly hawkish stance in 2019, after the potential launch of European Central Bank (ECB) tapering and tightening of Fed's monetary policy under its new chairman Jerome Powell, Erste Group said last month.

($ = 0.811383 euro)