Serbian central bank raises key policy rate to 11.25%

BELGRADE The Executive Board of the National Bank of Serbia (NBS) decided to raise the key policy rate to 11.25 percent Friday. Consistent with the NBS projection, year-on-year inflation temporarily slowed in November, though it remains above the upper bound of the target tolerance band, the NBS said in a release Friday. Serbian central bank raises key policy rate to 11.25% In this regard, fiscal consolidation measures, which have already yielded initial effects, are yet to give their full contribution to the reduction in year-on-year inflation over the next year, the release said. The NBS Executive Board also pointed to elevated dinar liquidity of the banking sector. It therefore decided to change the direction of its main open market operations towards the withdrawal of excess dinar liquidity so as not to encourage a rise in aggregate demand which could impact on inflation and the exchange rate, according to the release. Over the foreseeable future, inflation movements will for their major part be influenced by food and administered prices, and by whether aggregate demand will remain the key disinflationary factor. According to the NBS projection, year-on-year inflation will return within the target tolerance band by end-2013. The next rate-setting meeting of the Executive Board is scheduled for January 17, 2013, the release said. Tanjug

Serbian central bank raises key policy rate to 11.25%

In this regard, fiscal consolidation measures, which have already yielded initial effects, are yet to give their full contribution to the reduction in year-on-year inflation over the next year, the release said.

The NBS Executive Board also pointed to elevated dinar liquidity of the banking sector.

It therefore decided to change the direction of its main open market operations towards the withdrawal of excess dinar liquidity so as not to encourage a rise in aggregate demand which could impact on inflation and the exchange rate, according to the release.

Over the foreseeable future, inflation movements will for their major part be influenced by food and administered prices, and by whether aggregate demand will remain the key disinflationary factor.

According to the NBS projection, year-on-year inflation will return within the target tolerance band by end-2013.

The next rate-setting meeting of the Executive Board is scheduled for January 17, 2013, the release said.