September 6 (SeeNews) - Serbia's central bank said on Thursday it decided to keep its key repo rate unchanged at 3.0%.
"In making such a decision, the executive board was primarily guided by the expected inflation movement and its underlying factors, as well as the effects of past monetary policy easing," the central bank, NBS, said in a statement.
Inflation in Serbia is expected to remain below the middle of the 1.5%-4.5% target band over the next two years, NBS noted.
Serbia's annual consumer price inflation quickened to 2.4% in July from 2.3% in June, according to the most recent official data available. On a monthly comparison basis, Serbia's consumer price index (CPI) fell by 0.3% in July, after increasing by 0.4% in June.
Uncertainties stem largely from the international commodity and financial markets, while global oil price movements remain volatile, even though oil futures indicate a stabilisation of prices until the end of the year and a slight decrease by the end of 2019, the NBS noted.
The expected further monetary policy tightening by the Fed and a wind-down of the QE programme by the ECB could affect capital flows to emerging markets.However, the resilience of the Serbian economy to potential negative impact from the international environment has increased, owing to the strengthening of the macroeconomic fundamentals, the NBS said.
NBS cut the repo rate by a quarter of a percentage point to 3.25% in March and then to 3.0% in April to help guide inflation to the target band.
The central bank will hold its next rate-setting meeting on October 8.