The National Bank of Serbia (NBS) on Thursday lowered its key policy rate to help ease the negative effects of the coronavirus pandemic, Nova Ekonomija magazine reported.
The NBS Executive Board lowered the key policy rate to 1.5 percent, a press release said and added that another reason for the decision was to keep inflation within the target framework.
The Serbian central bank had already lowered its key policy rate by 50 base points in March and narrowed the corridor for basic interest rates from ±1.25 percentage points to ±1 percentage point against the key policy rate.
“The Executive Board stresses that the monetary and fiscal policy measures aimed at supporting economic growth are possible in conditions of secure low and stable inflation which, according to the latest available information, stood at 1.9 percent y.o.y. in February,” the press release said, adding that inflation pressure will continue to be low with some risk of dropping lower.
“Following the drop in the second quarter, economic recovery should come later in the year with the speed of recovery depending on the duration of the pandemic,” the NBS said and added that medium-term economic prospects are favorable.