Serbian central bank hikes key policy rate

The Executive Board of the National Bank of Serbia (NBS) raised the reference interest rate from 9.5 to 10 percent on Thursday. The NBS had not changed the rate since January 19, when it lowered it from 9.75 to 9.5 percent. Serbian central bank hikes key policy rate Though year-on-year inflation was around the lower end of the target inflation band in April, it is expected to rise moderately towards the target from May onwards. This rise will be driven by the growth in import prices, the onset of a new agricultural season, and the increase in administered prices in the second half of the year. Based on the NBS projection, inflation is expected to move around the upper bound of the target band in late 2012 and early 2013. With this in mind, the Executive Board voted to raise the key policy rate to 10 percent. The Executive Board noted once again that the degree of monetary policy restrictiveness in the coming period will depend primarily on the speed of enactment and implementation of the fiscal consolidation program, the intensity of the program itself, and continuation of the arrangement with the IMF. The next rate-setting meeting will take place on 12 July. Tanjug

Serbian central bank hikes key policy rate

Though year-on-year inflation was around the lower end of the target inflation band in April, it is expected to rise moderately towards the target from May onwards.

This rise will be driven by the growth in import prices, the onset of a new agricultural season, and the increase in administered prices in the second half of the year.

Based on the NBS projection, inflation is expected to move around the upper bound of the target band in late 2012 and early 2013. With this in mind, the Executive Board voted to raise the key policy rate to 10 percent.

The Executive Board noted once again that the degree of monetary policy restrictiveness in the coming period will depend primarily on the speed of enactment and implementation of the fiscal consolidation program, the intensity of the program itself, and continuation of the arrangement with the IMF.

The next rate-setting meeting will take place on 12 July.