- Decision
- Maintain
- Rate change
- 0 bps
- key policy rate
- 5.75%
The Executive Board of the National Bank of Serbia (NBS) left the key policy rate unchanged at 5.75 percent on 9 May, maintaining the deposit and lending facility rates at 4.5 percent and 7.0 percent, respectively, as it judged that substantial disinflation to 4.4 percent y/y in March—now within the 3 ± 1.5 pp target band—still warrants caution amid volatile global commodities and trade-policy uncertainty. Following three 25 bp cuts in 2024, the policy rate has been steady at 5.75 percent since September. The current corridor and liquidity settings remain in place to preserve a restrictive stance that the Board expects will bring headline inflation toward the 3 percent midpoint by year-end, supported by easing core inflation (5.1 percent in March), lower imported price pressures, an average new agricultural season and subdued oil futures. Real GDP grew a modest 2.0 percent y/y in Q1, dampened by weak external demand, issues in the European auto sector and domestic protests, though the NBS anticipates a pick-up later in 2025 on stronger auto production, new energy capacities and Expo 2027 infrastructure, with credit expanding around 10 percent. Externally, falling global oil prices, record highs for cocoa and coffee, and divergent policy outlooks at the ECB (easing) and Fed (more cautious) underscore two-way risks for inflation and capital flows. The central bank will continue to decide policy on a meeting-by-meeting basis, prioritising price and financial stability, and will release updated macro projections on 14 May.
Rate evolution
From June 2025 through September 2026, the National Bank of Serbia kept the key policy rate unchanged at 5.75%, extending a pause with no net change. The hold reflected actual and expected inflation and uncertainty, which eased in early autumn before worsening again, with mid-2025 decisions balancing weather- and drought-driven food inflation and an oil-price rise from Middle East tensions against softer domestic activity, while later decisions judged that the Government’s margin-capping decree, lower imported cost pressures, exchange-rate stability and earlier easing would contain inflation as lending and Serbia Expo 2027-related investment supported growth.
On 10 September 2026, the Executive Board again held the rate at 5.75%, citing actual and expected inflation and risks from the international environment. Year-on-year inflation remained within the 3±1.5% target band and stood at 1.9% in July, mainly because an exceptionally good harvest lowered fruit and vegetable prices, while significant second-round effects had not materialised and the economy proved more resilient than expected to the energy shock. The August projection envisaged inflation remaining within the target band over the next two years, moving around 4% from September 2026 and during 2027 before gradually declining, while core inflation stood at 4.5% in July.
Economic activity also exceeded expectations, with real gross domestic product growth accelerating to 3.8% year on year in the second quarter and prompting the National Bank of Serbia to raise its 2026 growth projection to 3.2%, while the Executive Board maintained a cautious stance as uncertainty over the Middle East conflict and oil prices remained elevated and reiterated that it would use all available instruments if stronger second-round effects lifted other prices through inflation expectations.