Macroeconomic policy

BELGRADE - The National Bank of Serbia (NBS) Executive Board decided on Thursday to keep the key policy rate on hold at 6.50 pct and the rates on deposit (5.25 pct) and lending (7.75 pct) facilities were also kept unchanged.

The Central Bank has announced that it will scrap the implementation regarding securities maintenance based on loan growth while raising the monthly maximum interest rates to be charged for credit cards. 

The bank said it is considering terminating the securities maintenance practice "in a short while."

Türkiye's Central Bank has decided to opt for lifting the key policy rate, increasing the one-week repo auction rate from 45 percent to 50 percent.

Most economists had expected the Central Bank, which held the policy rate steady last month after eight straight increases, to keep the rate unchanged at the Monetary Policy Committee (MPC) meeting on March 21.

The Central Bank has raised the monthly maximum interest rate on credit card cash withdrawals from 4.42 percent to 5 percent.

The bank's decision, which aimed at curbing credit card spending, was published in the Official Gazette on March 16 and came into force.

Conventional policies will be employed to curb inflation, Finance Minister Mehmet Şimşek has said, reiterating that there will be a steep fall in inflation in the second half of 2024.

In a recent announcement, the Bulgarian National Bank has confirmed that the base interest rate for February will stand at 3.79%, maintaining the status quo from January. This decision follows a marginal reduction of 0.01% made in December 2023.

The Central Bank of Türkiye has hiked its key interest rate by another 250 basis points to 45 percent, also signaling an end to its aggressive tightening cycle.

Inflation had already begun to rear its head in the autumn of 2021, several months before the Russian invasion of Ukraine, and was exacerbated by the war and the tight monetary policy of the European Central Bank, which, instead of boosting supply, was "attacking" imaginary enemies: excess demand that simply did not exist.

Moody's has revised Türkiye's outlook from stable to positive, citing it as a "decisive change in economic policy," in particular the return to orthodox monetary policy.

Inflation is high but is moving in line with the economic program, Treasury and Finance Minister Mehmet Şimşek has said, adding that under the current expectations, the decline in inflation will continue.