Serbia's central bank on Thursday decided to keep its policy interest rate unchanged, saying that inflation will likely weaken further in the coming months and the outlook for the economy has improved.
The executive board of the National Bank of Serbia maintained its one-week repurchase rate at 11.75 percent.
The bank said that annual inflation, which slowed down in the first quarter, would continue easing and fall within the target of 4-5 percent by the second half of 2013.
The bank, however, warned that in the coming months monetary policy restrictiveness will be affected by consistent implementation of fiscal consolidation, as well as by international developments in terms of the present situation in financial markets and the growth prospects of trade partners.
Serbia's efforts to secure membership in the European Union were thwarted this week after reconciliation talks over its effective control over northern Kosovo failed.
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