The National Bank of Serbia (NBS) has decided to keep the key policy rate at the level of three percent, the NBS said in a press release on Thursday.
The NBS executive board took the decision because inflation is within the planned frameworks, it said adding that caution in conducting monetary policy is still required primarily because of international events.
“The prospects for global economic growth are unfavorable and leading central banks, the FED and European Central Bank recently indicated the possibility of their monetary policies normalizing at a slower pace than expected. However, the extent to which the normalization will slow down and be different to what the market expects and that could cause instability in global capital trends,” the NBS said.
The NBS executive board believes that the Serbian economy has raised its resilience thanks to favourable macro-economic indicators and prosepects.
“Public finances are showing a surplus for the second year in a row with the current accounts deficit in the GDP at the same level as in 2017 despite increased imports, higher oil prices and lower outside demand,” the press release said. The executive board said that domestic demand will be the main element in the growth of the GDP this year.
The next NBS executive board session on the key policy rate will be held on March 7.