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UPDATE 1 - Serbia's c-bank holds key repo rate at 3.0%

Author Radomir Ralev
UPDATE 1 - Serbia's c-bank holds key repo rate at 3.0% By NMedjedov (Own work), via Wikimedia Commons

BELGRADE (Serbia), December 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 within the 1.5%-4.5% target band over the next two years, NBS noted.

Serbia's average annual consumer price inflation quickened to 2.2% in October from 2.1% in September, according to the latest official data available. On a monthly comparison basis, Serbia's consumerprice index (CPI) grew by 0.3% in October, after increasing by the same rate in September.

Uncertainties stem largely from the international markets, while global oil prices remain volatile despite their recent decline, 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 a 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 further to 3.0% in April to help guide inflation to its target band.

The central bank will hold its next rate-setting meeting on January 10.