NBS Raises Key Policy Rate to 5.25%

Source: eKapija Thursday, 12.01.2023. 13:32
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At today’s meeting, the NBS Executive Board voted to raise the key policy rate by 25 bp to 5.25%, and to increase the deposit and credit facility rates by the same amount – to 4.25% and 6.25%, respectively.

– The NBS continues to tighten monetary conditions and contain the second-round effects of cost-push pressures on price growth through inflation expectations. It thus helps inflation in Serbia to strike a downward trajectory and return within the target tolerance band until the end of the projection horizon. Today’s hike is the tenth in a row – since April 2022, the rate has been raised by 425 bp in total – the National Bank of Serbia (NBS) says in a press release.

It is added that the hitherto rate hikes have affected the interest rates in the markets of money, loans and savings, signaling the effectiveness of the monetary policy transmission mechanism via the interest rate channel.


– The Executive Board’s decision to tighten monetary conditions in the domestic market in a gradual and measured way reflects the view that inflation movements in Serbia are still largely dictated by the global energy crisis, lingering consequences of the pandemic, and the drought that hit our region – the press release says.

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