NBS keeps reference interest rate at one percent

Narodna banka Srbije, Banka, Srbija, zgrada,
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The Executive Board of the National Bank of Serbia (NBS) decided on Thursday to keep the reference interest rate at one percent.

The Board’s decision based the decision primarily on the favourable domestic economic trends and since the GDP real growth of 7.6 percent in the first half of the year exceeded the original expectations, the NBS statement said.

„The high rate of real economic growth is partly the result of last year’s low base, but also favourable current trends. The effects of the adopted monetary and fiscal policy measures, the preserved investment and consumer confidence, production capacities and jobs also contribute to that,“ it added.

Faster growth of economic activity indicates that the NBS projected GDP growth rate of 6.5 percent in 2021 could be exceeded.

„Regarding inflation, the Executive Board noted it was within the target (3 ± 1.5 percent) and that, as expected, it was 3.3 percent year-on-year in June and July,“ the statement said.

It added that „the slightly higher level of inflation compared to the beginning of the year was primarily due to last year’s low base, global rise in oil prices and other primary products in recent months, which, along with delays in global supply chains, led to higher costs on the world and domestic market.“