- Decision
- Maintain
- Rate change
- 0 bps
- key policy rate
- 5.75%
The Executive Board of the National Bank of Serbia (NBS) on 12 June left the key policy rate unchanged at 5.75 %, with the deposit and lending facility rates retained at 4.50 % and 7.00 %, respectively, judging that tight monetary conditions and decelerating inflation outweighed persistent global uncertainty tied to protectionism, volatile commodity prices and subdued external demand. After reducing the rate by a cumulative 75 bp in 2024 and pausing since September, the NBS preserved its existing corridor, keeping interbank liquidity conditions steady. Consumer price inflation slowed to 3.8 % y/y in May, within the 3 ± 1.5 pp target band, while core inflation eased to 4.6 %; the bank expects headline inflation to stay near current levels until mid-2025 before falling toward the 3 % midpoint by year-end, helped by lower import costs, declining energy prices and an average new agricultural season. GDP expanded 2.0 % y/y in Q1, with manufacturing-led industrial output up 2.4 %, and full-year growth is projected at 3.5 %, supported by double-digit credit growth and new capacity in the automotive and energy sectors as well as Expo 2027 infrastructure projects. The Board noted the ECB’s ongoing accommodation and a more cautious US Federal Reserve stance, alongside elevated global risk aversion that could influence capital flows to emerging markets. Policymakers will continue to decide on a meeting-to-meeting basis, prioritising price and financial stability, with the next rate-setting session scheduled for 10 July.
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.