The National Bank of Serbia (NBS) Executive Board on Thursday voted to keep the key policy rate at 5.75 percent, as well as the rates on deposit and lending facilities – at 4.5 percent and 7 percent, respectively, said the NBS.

The key policy rate has stood at 5.75 percent since September 2024, when, in the current monetary policy easing cycle, it was cut by 25 bp for the third time, following cuts in June and July of the same year. The effects of these cuts can be expected to play out in the coming period as well, said the central bank.

As stated by the Board, although inflation is moving within the target band, it is necessary to continue pursuing a cautious monetary policy, bearing in mind the conditions in the international environment. The complexity of these conditions is evidenced by the fact that global inflation remains generally high, while economic growth in many countries and regions is relatively slow.

However, it was assessed that the greatest concern continues to stem from the unpredictability of macroeconomic developments in the international environment, primarily the rise in geopolitical tensions, the strengthening of protectionism, and the fragmentation of the global market.

In line with estimates of leading relevant institutions, the Executive Board has taken into account that new protectionist measures could impact the international macroeconomic environment, trade flows and supply chains, with implications for inflation and economic activity, necessitating caution in the conduct of monetary policy.

Caution is also needed due to uncertainties regarding the movements of global prices of energy and other primary commodities, as well as certain raw materials in the food industry, whose prices have recently reached record-high levels on global exchanges due to droughts in leading producer countries.

The Executive Board said that inflation should continue to move within the target bounds, trending early this year at a similar level as at end-2024 and slowing down around mid-2025. The slowdown will be mainly prompted by the still tight monetary conditions and lower imported inflation, as well as the onset of a new agricultural season, assumed to be average.

At its meeting on Thursday, the Executive Board adopted the February Inflation Report with the latest macroeconomic projections that will be presented to the public in more detail on 19 February.

The next rate-setting meeting where economic developments will be considered is scheduled for 13 March.