The National Bank of Serbia has decided to keep its key policy rate at 5.75 percent, indicating a steady approach to monetary policy as inflation rates remain within the targeted parameters. This decision reflects the bank’s confidence in the sustainability of disinflation trends observed throughout 2025, while also considering ongoing external and domestic challenges.
Throughout the year, inflation dynamics have shown significant improvement. After reaching a peak earlier, the headline inflation rate decreased to 2.7 percent year-on-year in December, falling comfortably within the central bank’s acceptable range. Core inflation has also eased, aided by stricter monetary policies, stable exchange rates, and a decline in global commodity prices.
By maintaining the current interest rate, the central bank aims to strike a balance between ensuring price stability and fostering economic growth. Positive real interest rates contribute to the stability of the dinar and help anchor inflation expectations while preventing excessive tightening that could hinder investment and credit growth. Although lending growth has decelerated, it remains positive, particularly within corporate sectors.
External factors continue to play a significant role in shaping monetary policy decisions. High global interest rates restrict Serbia’s capacity for rapid easing of its own rates. Nevertheless, sufficient capital inflows and robust foreign exchange reserves support currency stability. The central bank’s cautious approach is designed to uphold its credibility amid prevailing global uncertainties.
Looking forward, monetary policy is anticipated to maintain a restrictive-neutral stance through early 2026. Any potential easing will be contingent upon ongoing moderation in inflation and stable external conditions. The central bank emphasizes that maintaining price stability is paramount, even as considerations for growth become increasingly important.
