The National Bank of Serbia maintained its key policy rate at 5.75 percent, signaling continuity in monetary policy as inflation remained within the targeted range. The decision reflects confidence that disinflation trends observed during 2025 are durable, while also acknowledging persistent external and domestic risks.
Inflation dynamics improved significantly over the year. After peaking earlier, headline inflation slowed to 2.7 percent year-on-year in December, comfortably within the central bank’s tolerance band. Core inflation also moderated, supported by tighter monetary conditions, exchange rate stability, and easing global commodity prices.
By holding rates steady, the central bank aims to balance price stability with growth considerations. Real interest rates remain positive, supporting dinar stability and anchoring inflation expectations, while avoiding excessive tightening that could suppress investment and credit activity. Lending growth slowed but remained positive, particularly in corporate segments.
External conditions continue to influence policy. Global interest rates remain elevated, limiting Serbia’s room for rapid easing. At the same time, capital inflows and foreign exchange reserves remain sufficient to support currency stability. The central bank’s cautious stance reflects the need to preserve credibility amid global uncertainty.
Looking ahead, monetary policy is expected to remain restrictive-neutral through early 2026. Any easing will depend on continued inflation moderation and stable external conditions. The central bank’s message is clear: price stability remains the anchor, even as growth considerations gain prominence.
