- Decision
- Maintain
- Rate change
- 0 bps
- key policy rate
- 5.75%
Serbia’s National Bank Executive Board kept the key policy rate at 5.75 percent on 7 August, together with an unchanged 4.5 percent deposit facility and 7.0 percent lending facility, citing a renewed uptick in headline inflation to 4.6 percent y/y in June—driven by higher global food input and oil prices—and weaker-than-expected 2 percent y/y GDP growth in Q2. After three 25 bp cuts in mid-2024, the benchmark has remained at 5.75 percent ever since. The interest-rate corridor was left intact and the central bank reiterated its commitment to exchange-rate stability, noting that easier financing conditions have supported 10.8 percent y/y credit growth in June. Inflation is expected to hover near the 4.5 percent upper edge of the 3 ± 1.5 pp target through end-2025 before easing in 2026, while economic activity should pick up later this year on accelerating car production and Expo 2027 infrastructure projects. The Board warned that international uncertainty—stemming from trade policy shifts, lingering geopolitical tensions and volatile energy prices—remains high, and observed that both the ECB and Federal Reserve have also stayed cautious on rates. It will continue to set policy on a meeting-by-meeting basis, with the next decision scheduled for 11 September.
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.