Friday, June 10, 2011

Serbia Central Bank Drops Rate 50bps to 12.00%

The National Bank of Serbia dropped its 2-week repo rate by 50 basis points to 12.00% from 12.50% previously, as the Belgrade based bank sees a peak in inflation.  The Bank said: "The cut in the benchmark interest rate was necessary to stabilize inflation around the target over the medium term,".

In its May meeting the Bank held the 2-week repo rate unchanged at 12.50%.  Serbia reported inflation of 14.7% in April, up from 14.1% in March, and above the bank's inflation target range of 3-6%.  However it is expected that inflation will reduce in the near term due to a good harvest, weak aggregate demand and monetary policy measures taken to date.


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