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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), February 7 (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 in the coming period, NBS noted.

Serbia's average annual consumer price inflation accelerated to 2.0% in December, from 1.9% in November, according to the latest official data available. On a monthly comparison basis, Serbia's consumer price index (CPI) rose by 0.1% in December, after dropping by 0.3% in November.

The central bank keeps caution in its monetary policy, due to the international market developments, while demand- and supply-side factors make the future movements of oil prices uncertain, the central bank noted.

The Fed and the ECB signalled a slower than expected pace of monetary policy normalisation which could bring volatility to global capital flows, the NBS said.

However, the resilience of the Serbian economy to a potential negative impact from the international environment has increased, owing to improved macroeconomic indicators and prospects.

NBS cut the repo rate by a quarter of a percentage point to 3.25% in March 2018 and then lowered it further to 3.0% in April 2018 to help guide inflation to its target band.

The central bank will hold its next rate-setting meeting on March 7.