- 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% and maintained the deposit and lending facility rates at 4.5% and 7.0%, respectively, citing the sharp deceleration of headline inflation to 2.8 % y/y in October and expectations that it will hover around the 3 % midpoint of the 3 ± 1.5 pp target band while a six-month government cap on retail and wholesale food and household-product margins remains in place. The rate has been steady at 5.75 % since September 2024, following three 25 bp cuts earlier that year. The corridor is unchanged and the central bank continues to underpin growth through exchange-rate stability and favourable credit conditions, reflected in a 12.8 % y/y rise in corporate and household lending in September. GDP grew 2.0 % y/y in Q3, driven by automotive output and services, though investment and consumer confidence were dampened by global and domestic uncertainties. Global factors—higher tariffs, protectionism and geopolitical tensions—are keeping commodity and financial markets volatile; meanwhile, the US Federal Reserve cut rates by 25 bp in September and October, whereas the European Central Bank has paused easing. The Board reiterated a cautious, meeting-by-meeting approach focused on inflation dynamics and financial stability, with the next rate decision set for 11 December.
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.