The National Bank of Serbia left its key policy rate unchanged at 5.75% at its August 2026 meeting, maintaining benchmark borrowing costs at the same level since September 2024. This extended pause suggests that the NBS views the risks of inflation and unemployment as relatively balanced, despite macroeconomic headwinds stemming from the war in the Middle East and its impact on global energy prices.
In July, headline inflation eased to a five-year low of 1.9%, placing it near the lower bound of the central bank’s 1.5%–4.5% target range. However, the Executive Board signaled that base effects are likely to push inflation higher, potentially reaching about 4% by September.
The dinar also remained firm, trading close to 101 per USD, not far from its strongest level since late 2021. At the same time, expectations that GDP growth will strengthen over the course of the year have tempered the case for easing, limiting the scope for looser financial conditions.
