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Serbia's c-bank to keep key repo rate at 2.25% in short term - Erste

Author Radomir Ralev
Serbia's c-bank to keep key repo rate at 2.25% in short term - Erste Author: SeeNews. License: All rights reserved.

BELGRADE (Serbia), November 8 (SeeNews) - Erste Group expects Serbia's central bank, NBS, to keep its repo rate at 2.25% in the near term after cutting it by 0.25 percentage points on Thursday, the Austrian banking group said.

"Following two consecutive rate cuts in July/August and an additional one now in November, we see the central bank holding the key rate unchanged at 2.25% in the near term, while closely monitoring inflation and external environment developments," Erste Group said in an instant comment on Thursday. 

Overall, the stance of the monetary policy should remain accommodative and growth-supportive, with further interventions on the foreign exchange market to tame dinar volatility, Erste Group said.

NBS said on Thursday it will cut its key repo rate to 2.25% from 2.5% due to the further weakening of inflationary pressures resulting from lower food and oil prices. 

"Though we see it as a close call, factors outlined in favour of such a decision were low inflation developments, more favorable domestic macroeconomic conditions and dovish global central banks stance, with renewed appreciation pressures on dinar also playing in favour for the rate cut," Erste Group said.

The NBS will hold its next rate-setting meeting on December 12.