February 8 (SeeNews) - Serbia's central bank, NBS, said on Thursday it will keep its key repo rate unchanged at 3.5%.
"In making such decision, the Executive Board had in mind the February inflation projection and its factors, as well as the expected effects of past monetary policy easing," the central bank said in a statement.
The inflation rate will remain within the target band of 1.5%-4.5% in the next two years, NBS noted.
Serbia's annual consumer price inflation stood at 3.0% in December, after growing by 2.8% in November, according to the latest official data available. On a monthly comparison basis, Serbia's consumer price index rose by 0.2% in December after remaining unchanged in November.
Uncertainties in the international financial markets stem largely from the diverging monetary policies of the leading central banks, the Fed and ECB, which may impact capital flows to emerging economies, including Serbia. In addition, there is uncertainty around the global prices of primary commodities, especially oil, which recorded growth in the previous months, NBS noted.
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.
The central bank cut the repo rate by 0.25 of a percentage point to 3.75% in September and lowered it further to 3.5% in October to help guide inflation to the target band.
The NBS will hold its next rate-setting meeting on March 8.