The benchmark interest rate was cut by 50bps to help lessen the disruption caused by the Coronavirus outbreak.

Yesterday the National Bank of Serbia announced a cut of its interest rate to 1.75%, which is a reduction of 50bps. Such a decision was brought a day ahead of a scheduled meeting, to help lessen the disruption caused by the Covid-19 outbreak.

The National Bank of Serbia stated that the domestic economic and financial system is stable and strong enough to cope with the potential negative consequences of the spread of the Coronavirus. They further state that the domestic factors that will contribute to the growth of the domestic economy over the past years are learning that it will have a strong incentive effect on economic activity in Serbia, which will be greatly outweighed by the potential negative effect from the international environment.

According to estimates by the government, the International Monetary Fund and the central bank, Serbia’s economic growth is seen at 4.2% in 2019 and around 4% in 2020.