UPDATE 1 - Serbia's c-bank cuts key repo rate to 2.25%

In making this decision, the central bank was guided by the further weakening of inflationary pressures resulting from lower food and oil prices, NBS said in a statement. 

"Subdued inflationary pressures are also indicated by core inflation, which remains low and stable, as well as inflation expectations of financial and corporate sectors being in the lower half of the target band for both a year and two years ahead," the central bank said.

The inflation rate is expected to remain in the lower part of the 1.5%-3.5% target band by the end of this year and in the first half of 2020.

Serbia's average consumer prices rose by 1.1% year-on-year in September, after growing by 1.3% in August, official statistics show. On a monthly comparison basis, Serbia's consumer price index (CPI) fell by 0.5% in September, after remaining unchanged in August, according to figures published on the website of the national statistical office.

The decision to cut the key policy rate further was also influenced by developments in the international environment, notably the slowdown in global trade and growth, and by the monetary policy accommodation by leading central banks, NBS said.

The central bank last cut the key repo rate by 0.25 percentage points to 2.75% in July and by a further 0.25 points to 2.5% in August to help guide inflation to the target band.

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