November 8 (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 average annual consumer price inflation slowed to 2.1% in September from 2.6% in August, according to the latest official data available. On a monthly comparison basis, Serbia's consumer price index (CPI) fell by 0.3% in September, after increasing by 0.3% in August.
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 central bank 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.
NBS cut the repo rate by a quarter of a percentage point to 3.25% in March and then lowered it to 3.0% in April to help guide inflation to the target band.
The central bank will hold its next rate-setting meeting on December 6.