May 12 Serbia’s central bank left its benchmark interest rate at 4 percent on Friday for the 10th consecutive month, opting to watch global monetary policy trends and keep a lid on rising domestic inflation.
All 14 analysts and traders polled by Reuters this week and last said the central bank would keep the rate , on hold.
Serbia’s annual inflation rate rose in April to 4 percent, up, from 3.6 percent in March, inside bank’s 2017 inflation target of 3 percent, give or take 1.5 percentage points.
In a statement, the bank said that inflation and policy measures so far motivated it to keep the rate steady. Global developments also played a role it said.
“Uncertainty in the global markets largely stems from divergent monetary policies of leading dentral banks, the U.S. Fed and the European Central Bank, which can influence global capital flow to emerging markets, including Serbia,” the bank said.
The dinar exchange rate to the euro, the preferred foreign currency, fluctuated in 2017. It has gained 0.3 percent against the euro so far, recovering from a record low on Feb. 3 when it stood at the rate of 124.01.
To stabilise the dinar’s exchange rate, the central bank has sold 345 million euros and purchased 30 million euros so far in 2017. On Friday, after bank’s decision, the dinar traded at the rate of 123.2 at 1010 GMT, largely the same as the day before.
