Serbia’s central bank will keep its benchmark interest rate unchanged at 4 percent on Friday for the 10th consecutive month, over uncertainties from abroad and rising domestic inflation, a Reuters poll shows.
All 14 analysts and traders polled by Reuters <ECONALLRS> this week and last said the central bank would keep the rate <RSCBIR=ECI>, <RSDREPO=> on hold.
In April, the central bank said it kept the rate steady due to policies of key international central banks and their impact on emerging markets.
Serbia’s annual inflation rate rose in March to 3.6 percent, from 3.2 percent a month earlier, inside the 2017 target of between 3 percent and 4.5 percent. The Statistics Office is scheduled to announce April inflation data on April 12.
“The central bank will likely hold the rate to safeguard the dinar exchange rate (versus euro) and also due to expectations of US Fed’s rate hike,” said Sasa Djogovic, an economist with the Belgrade-based Institute for Market Research.
The dinar <EURRSD=> exchange rate to euro, the preferred foreign currency, fluctuated in 2017. It has gained 0.3 percent against the euro so far, recovering from an all time low on Feb 3 when it stood at the rate of 124.01.
To stabilise dinar’s exchange rate, the central bank sold 345 million euros and purchased 30 million euros so far in 2017. On Wednesday, the dinar traded at the rate of 123.19 at 0900GMT.
