- 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 at 5.75 percent and maintained the deposit and lending facility rates at 4.5 percent and 7.0 percent respectively, judging that steady rates remain appropriate given headline inflation of 4.7 percent in August and core inflation of 4.5 percent, both expected to hover around the 3 ± 1.5 percentage-point target band through end-2025 as food-price pressures ease and global cost forces moderate. The rate has been unchanged since September 2024 following three 25 bp cuts earlier that year. The corridor is therefore unchanged, and the Board reaffirmed the need for “caution” amid persistent external uncertainty. GDP expanded by an average 2 percent y/y in H1, with the Board projecting faster growth in H2 on rising automotive output and infrastructure spending under the “Leap into the Future – Serbia Expo 2027” programme; double-digit credit growth and a stable dinar are seen supporting the outlook. Externally, geopolitical tensions still threaten energy prices, while the US Federal Reserve cut rates by 25 bp in September and may ease further even as the European Central Bank keeps policy steady. The Board will decide policy “meeting-to-meeting” to safeguard price and financial stability, with the next rate-setting session scheduled for 13 November 2025.
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.