The National Bank of Serbia (NBS) said on Thursday that it had lowered the key policy rate by 25 base points to 1.25 percent.

A press release said that the key policy rate was reduced as part of the easing of monetary policy, adding that this could help ease the effects of the coronavirus pandemic and the growth of the GDP in 2021 of at least six percent.  

“In taking the decision, the NBS Executive Board bore in mind that the scale of the global crisis caused by the spread of the coronavirus (Covid-19) calls for additional monetary policy support to the economy, in order to mitigate the negative effects of the crisis and boost economic growth in the period ahead,” it said.

The press release said that the decision to cut the key policy rate was taken “in an environment of low and stable inflation which continued to slow in April to 0.6% y-o-y, consistent with NBS expectations”.

The NBS believes that inflation is likely to move around the lower limit of the target band (3±1.5%) to the end of the year.

The next rate-setting meeting will be held on 9 July.