Central Bank Serbia Leaves Rates Unchanged

The National Bank of Serbia kept its key policy rate unchanged at 5.75% during its July 2026 meeting, citing risks stemming from geopolitical tensions. Headline inflation accelerated to 3.5% in May, its highest level since mid-2025, but remained within the central bank's target range of 3±1.5%. The increase was driven by higher global oil prices, partly offset by government measures. Economic activity accelerated to 3.2% in Q1 2026 from 2.2%, supported by the service sector and agriculture, with favorable trends in manufacturing, retail and turism. The central bank expects inflation to ease by September and remain around the upper end of the target range, although it could temporarily exceed it in late 2026 or early 2027. Meanwhile, economic activity remains affected by global uncertainty and volatile energy prices. Future decisions will aim to maintain exchange rate stability, taking into account inflation trends to which will react with all available instruments.

The National Bank of Serbia kept its key policy rate unchanged at 5.75% during its June 2026 meeting, adopting a cautious stance while assessing the economic fallout from the Middle East war and the Strait of Hormuz closure. Policymakers expressed concerns that the energy crisis could fuel inflation and weigh on growth. The NBS now explicitly forecasts a temporary breach of the upper limit of its inflation tolerance band around the fourth quarter of 2026. The central bank targets inflation at 3%, with a tolerance range of ±1.5 percentage points. It also confirmed that if global oil price increases trigger stronger second-round effects, such as higher inflation expectations, the NBS will respond decisively using all available policy tools.

The National Bank of Serbia kept its key policy rate unchanged at 5.75% at its May 2026 meeting, extending the current policy stance that has been in place since late 2024. The central bank also left its deposit and lending facility rates unchanged at 4.5% and 7%, respectively. Recent geopolitical tensions and inflation trends were taken into the account. Headline inflation rose below the central target value at 2.8% in March, and inflationary pressures are expected to gradually intensify later in the year. Rising costs and weaker disposable income could weigh on household consumption and limit economic growth prospects. The economy expanded 3% in the first quarter of the year, supported by an increase in the processing industry, which boosted exports, retail trade and tourism. However, economic outlook remains clouded by global uncertainty, and policymakers will continue to pursue a prudent monetary policy while continuing to safeguard relative exchange rate stability.