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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CEE
- National Bank of Serbia (NBS) decided to leave its benchmark rate steady at 1% as expected for a 13th straight month in today's meeting.
- We have seen that the NBS has not followed its CEE peers in recent months, where central banks have been raising rates aggressively to curb inflationary pressures.
- Yesterday, economic data showed that inflation accelerated to 7.9% YoY in December (as exp.), up from 7.5% the previous month, diverging significant from the NBS 4.5% upper tolerance band.
- Policymakers are choosing to keep interest rates unchanged for two main reasons:
- First, it is likely that inflation is close to its peak and keeping rates low could limit the downside risks on the economic activity as Covid uncertainty has been surging in recent weeks.
- Second, the Serbian Dinar (RSD) seems pegged to the EUR at 117.60, therefore the NBS may mirror the ECB policy outlook in order to avoid currency interventions as rising interest rate differential will drive RSD higher (vs. Euro)
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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