The National Bank of Serbia (NBS) said on Thursday that its key policy rate will remain unchanged at 1 percent.

“The NBS Executive Board voted to keep the key policy rate unchanged at 1.0% and to continue tightening monetary conditions, using the flexibility of the monetary policy framework, by raising the weighted average repo rate in reverse repo auctions, as well as the percentage of excess dinar liquidity withdrawn in those auctions,” a press release said.

It said that “available monthly indicators suggest that economic activity in the beginning of the year is broadly in line with the NBS’s expectations”. “Growth continues to be led by services, construction and mining, while lower activity in the overall industry still mostly reflects the weaker production in the energy sector, and partly also lower manufacturing output due to persistent disruptions to global supply chains,” the press release said.

“Monetary policy decisions in the period ahead will depend on the movement of factors in the international and domestic environment and the assessment of intensity and durability of inflationary pressures stemming from those factors. The NBS stands ready to respond using all available monetary policy instruments in case of materialisation of any of the risks that could have consequences for medium-term price and financial stability,” it said.