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Serbian central bank maintains key rate at 3.0%

The National Bank of Serbia held its key policy rate steady at 3.0% as it maintained expectations that annual inflation will move within the target tolerance band in the next two years.

Inflation came in at 2.6% in August compared with the central bank's target of 3%, plus or minus 1.5%. Prices over the medium term will be driven by gradually increasing aggregate demand, the bank said.

Serbia's GDP growth is forecast to surpass 4% in 2018. But policymakers warned that external risks could arise from such factors as oil price volatility, policy normalization in advanced economies and trade-related concerns.