BELGRADE May 14 The scope of future Serbian
monetary policy easing will be determined by the effects of the
Ukrainian crisis and how the government implements its fiscal
consolidation measures, a central bank report said on Wednesday.
Serbia's central bank cut benchmark rate by 50 basis points
to 9 percent last week on slowing inflation and after the new
government pledged to cut spending.
In its quarterly report on inflation the bank said future
rate cuts will depend on potential investors' risk aversion
caused by crisis in Ukraine as well as on the success of the
government's austerity measures.
"The Ukrainian crisis could have negative effects on Serbia
through a (external) price rise of energy and food," the bank
said. "Also it could cause risk aversion among investors and
their decision to reduce exposure in emerging markets."
It said the government's fiscal cuts will hamper domestic
demand in 2015 and keep growth below its forecast of 2 percent,
but it did not give more precise figure.
(Reporting by Ivana Sekularac; Editing by Toby Chopra)