Macro Analysis /
Serbia

EEMEA Macro Flash - Serbia: NBS likely to remain on hold this year and next

    Mauro Giorgio Marrano
    Mauro Giorgio Marrano

    Senior CEE Economist

    UniCredit
    13 April 2021
    Published by
    • The National Bank of Serbia (NBS) kept its policy rate unchanged at 1.00%, in line with expectations.
    • We expect the NBS to keep its policy rate unchanged in 2021 and 2022.
    • Inflation is likely to remain below target over the forecast horizon. We expect inflation to rise further in the coming months but to remain below 3%.
    • Oil prices and global supply disruptions present the main upside risks to the inflation outlook, as was also reflected in the recent rise in PPI inflation.
    • The Serbian dinar is likely to remain stable, with the NBS intervening to preserve the stability of the currency if pressure arises in the event of EM risk-off sentiment. FX reserves remain comfortably high.
    • We see a low probability for changes in monetary-policy rates in 2021-22, with the probability of a hike slightly higher than that of a cut.