August 9 (SeeNews) - Erste Group expects Serbia's central bank, NBS, to keep its repo rate unchanged at 2.5% by the end of the year, the Austria-based banking group said.
"Following two consecutive rate cuts, we see the central bank holding the key rate unchanged at 2.50% by the year's end, while closely monitoring inflation and external environment developments," Erste said in a note on Thursday, after NBS announced the second rate cut in as many months.
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 opined.
On Thursday, Serbia's central bank decided to cut its key repo rate to 2.5% from 2.75% to back lending and economic growth amid low inflationary pressure. The central bank said it was guided by the medium-term inflation projection and the expected development of other macroeconomic indicators from the domestic and international environment.
NBS cut the repo rate by a quarter of a percentage point to 2.75% in July, saying the easing aimed to support economic growth.