- Decision
- Maintain
- Rate change
- 0 bps
- Reference interest rate
- 5.75%
The Executive Board of the National Bank of Serbia (NBS) kept its key policy rate at 5.75 %, alongside unchanged deposit and lending facility rates of 4.5 % and 7.0 %, citing a cautious stance amid a projected, but temporary, oil-price-driven uptick in inflation and elevated geopolitical risks. The policy rate has held at 5.75 % since September 2024, following three 25 bp cuts earlier that year. The NBS will continue to anchor the dinar through exchange-rate stability while monitoring liquidity conditions and “using all available instruments” should higher oil costs ignite broader price pressures. Year-on-year inflation eased to 2.8 % in March—below the 3 % midpoint of the 3 ± 1.5 pp target band—and is expected to rise modestly toward a peak around end-2026/early-2027 before retreating. First-quarter GDP grew 3 % y/y, buoyed by stronger manufacturing, retail trade and tourism, and supported by lending growth that accelerated to nearly 17 % y/y in March. As a net energy importer, Serbia remains vulnerable to the recent surge in global oil prices, which is already lifting domestic fuel costs and could pass through to food and other prices, while Middle East tensions threaten shipping, supply chains and investor sentiment. The Board reaffirmed its readiness to tighten policy if second-round effects on inflation expectations emerge.
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.