The National Bank of Serbia (NBS) Executive Board voted to raise the key policy rate by 25 bp to 6.25 percent, said the NBS.

It also raised the deposit and lending facilities rates to 5 percent and 7.5 percent, respectively.

“In making the decision, the Executive Board concluded it is necessary to continue to moderately tighten monetary conditions to pre-empt a surge in inflation expectations and make sure that inflation strikes a downward path and returns within the target tolerance band in the projection horizon. The pass-through of the hitherto key policy rate hikes onto the rates in the markets of money, loans and savings signals the efficiency of the monetary policy transmission mechanism through the interest rate channel,” the NBS said.