- Decision
- Maintain
- Rate change
- 0 bps
- Reference interest rate
- 5.75%
The National Bank of Serbia Executive Board held the key policy rate at 5.75%, citing actual and expected inflation and international risks, while upgrading its growth outlook. The rate was unchanged at every reported decision from September 2025 through August 2026. The central bank also kept the deposit and lending facility rates at 4.5% and 7.0%, respectively, and maintained relative exchange-rate stability. Annual inflation was 1.9% in July, within the 3% ±1.5 percentage point target band, and is projected to remain within the band over the next two years, although it is expected near 4% from September 2026 and through 2027 before gradually declining. Real GDP growth accelerated to 3.8% in the second quarter, prompting an upward revision to the 2026 growth forecast, while unemployment fell to a record low of 7.2%. The central bank said Middle East tensions and oil prices remain key global risks, with potential spillovers to costs, supply chains and capital flows. It will continue a cautious, data-dependent policy and use all available instruments if higher oil prices produce stronger second-round inflation effects.
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.