- Decision
- Maintain
- Rate change
- 0 bps
- Reference interest rate
- 5.75%
The National Bank of Serbia (NBS) Executive Board held the key policy rate at 5.75% in August, citing actual and expected inflation and international risks while noting an improved growth outlook. The rate has remained at 5.75% over the past year. The NBS also held the deposit and lending facility rates at 4.5% and 7.0%, respectively. Annual inflation fell to 1.9% in July, below expectations, and is projected to be lower this year than forecast in May and remain within the 3±1.5% target band through the projection horizon, despite an expected rise to around 4% in September due mainly to base effects. Preliminary data showed real gross domestic product growth accelerated to 3.6% year on year in the second quarter, supported chiefly by services amid stronger private consumption. The NBS will maintain relative exchange-rate stability. The effects of the Middle East conflict and higher global oil prices have so far been smaller than initially expected, but prolonged or intensified tensions could affect production and transport costs, supply chains, capital flows and inflation. The NBS will continue its cautious, data-dependent approach and use all available instruments if higher oil prices generate stronger second-round effects through inflation expectations.
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.