Serbia's c. bank raises key rate

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The National Bank of Serbia (NBS) hiked its main interest rate by 50 basis points to 2.5% on Thursday, the third straight rise in borrowing costs.

"As the NBS interest corridor remained unchanged (±100 bp, i.e. ±1 pp relative to the key policy rate), the credit facility rate equals 3.5% and the deposit facility rate 1.5%," the central bank said in a statement.

Interest rates are now at their highest level since 2019, amid the Ukraine conflict, a further spike in prices of agricultural commodities and industrial raw materials, and ongoing supply chain constraints.

The inflation in Serbia hit nine-year highs of 9.6% in April but is expected to slow in the second half of the year. Core inflation showed 5.5% in April. 

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