National Bank of Serbia kept its key policy rate at 3.0% on expectations that inflation will continue to fluctuate within its tolerance band.

Annual inflation came in at 2.3% in June compared with 2.1% in May. This figure was consistent with the central bank's target of 3%, plus or minus 1.5 percentage points. Policymakers said annual inflation should remain in this range over the next two years.

Annual GDP growth came in at 4.5% for the first half of 2018. The central bank said previous rate cuts contributed to this expansion.

The bank added that policy normalization by major central banks, global trade uncertainties and oil price volatility suggest that caution is required.