Inflation slows to 2.7 percent as policy rate holds at 5.75 percent
The National Bank of Serbia maintained its key policy rate at 5.75 percent while inflation slowed to 2.7 percent in June 2026. Presenting the 2025 annual reports to parliament, the central bank highlighted gross foreign exchange reserves of €29.0 billion.
Disinflation takes hold at 2.7 percent
Annual inflation averaged 3.8 percent across 2025 before slowing to 2.7 percent in June 2026, supported by government margin caps on retail food and household products.
Food prices fell 3.7 percent year-on-year in June, while headline inflation remained within the target tolerance band.
The National Bank of Serbia kept its key policy rate at 5.75 percent to preserve monetary restraint.
Corporate lending rates on dinar loans decreased by 0.7 percentage points to 6.2 percent, and household borrowing rates dropped 1.8 percentage points to 8.1 percent.
Total corporate and household lending expanded by 15.4 percent in 2025, accelerating to approximately 17 percent year-on-year in June 2026.
Buffering shocks with gold and reserves
Gross foreign exchange reserves stood at €29.0 billion at end-2025, covering 6.7 months of imports.
The central bank net sold €580 million in the foreign exchange market to absorb depreciation pressures stemming from sanctions on the domestic oil industry.
Gold reserves reached 52.5 tonnes worth €6.2 billion at end-2025, expanding to 54.6 tonnes by June 2026.
Non-performing loans across the banking sector fell to a historic low of 2.1 percent, while dinar savings rose nearly 15 percent.
Administrative stability is not structural reform
Margin caps and rate ceilings suppressed inflation, but administrative controls cannot replace market discipline.
Heavy foreign exchange interventions protected the dinar, yet ongoing sanctions keep external risks elevated.
True stability requires removing price limits without triggering secondary inflationary waves.