The Executive Board of the National Bank of Serbia (NBS) voted again to keep the key rate at 6.5% due to accelerated inflation deceleration. Despite high-interest rates, GDP increased by 3.5% in Q3 due to infrastructural investments.
The focus of attention in recent weeks has been on (geo)political events. The ongoing conflict between Israel and Palestine escalated once again into acts of war, the intensity of which, however, is substantially higher than in previous years. Nevertheless, it caused only limited uncertainty on global markets, at least so far. The Swiss franc gained and the U.S. dollar also benefited from these events, even if it does not seem like it at first glance. In Poland, the expected change of power in the parliamentary elections in favor of pro-European forces caused considerable euphoria in the markets and a stronger złoty. The Serbian dinar defied the political environment and showed its strength, supported by capital inflows. The weak Russian rouble finally led to the long-discussed reintroduction of capital controls.
This issues features