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Serb cbank holds rates, seeks proof for low prices

Published 12/22/2008, 05:56 AM
Updated 12/22/2008, 06:00 AM
EUR/RSD
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BELGRADE, Dec 22 (Reuters) - Serbia's central bank on Monday left its key policy rate on hold, a senior central bank source told Reuters.

The decision came despite mounting pressure to cut borrowing costs and bolster growth amid expectations that end-year headline inflation was likely to fall to single digits.

The rate stayed at 17.75 percent, in line with market expectations, as dinar depreciation pressures outweighed the improving inflation outlook.

The bank last raised its 2-week repo rate by 2 percentage points to 17.75 percent on Oct. 31 to fight double digit inflation and prop up the faltering dinar , the biggest loser among central and east European currencies hit by investor flight from emerging markets. (Reporting by Gordana Filipovic; Editing by Stephen Nisbet)

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