Central Banks Split: One Hikes, One Holds, One Moves Slowly, and the Treasury Buys Yen

Serbia hikes against an energy shock

The National Bank of Serbia raised its key policy rate by 25 basis points to 6%, with the deposit facility rate raised to 4.75% and the lending facility rate raised to 7.25%. The bank said the hike is intended to prevent second-round effects of the energy shock on prices. Year-on-year inflation in Serbia rose to 4.1% in September 2026, and the bank expects inflation to exceed the upper bound of the target tolerance band next year before returning within the band by the end of 2027. m:…1852

The hike came with a strong growth picture and a softer outlook. Real GDP growth in Q3 2026 was 4.0%, the bank expects 2026 GDP growth to be at least 3.5%, and the 2027 GDP growth projection has been downgraded to 4.0%. The next rate-setting meeting will take place on 10 December, so the board has a month to see whether the energy shock is still feeding through to prices. m:…1852

Romania holds with higher inflation

Romania's central bank took the other decision. The National Bank of Romania board decided to keep the monetary policy rate at 6.50 percent per annum, with the lending facility rate unchanged at 7.50 percent per annum and the deposit facility rate unchanged at 5.50 percent per annum. The annual inflation rate rose to 6.94 percent in October 2026 from 6.61 percent in September 2026, and the bank expects the annual inflation rate to re-enter the target band in 2028 Q1. m:…0050

The Romanian board is betting that the economy heals while inflation cools slowly. The bank forecasts a moderate economic recovery in 2026 H2, the ILO unemployment rate reached 6.4 percent in 2026 Q3, and the annual growth rate of credit to the private sector held steady at 8.2 percent in September 2026. Holding at 6.50 percent while inflation runs at 6.94 percent is a decision to wait for the forecast, not to chase the number. m:…0050

Sweden moves gradually, and the dollar drifts

Sweden's Riksbank is moving in the same direction as Serbia, but at its own pace. The Riksbank raised the policy rate to 2 per cent, and Deputy Governor Aino Bunge said it is likely that interest rates will be raised further over the coming year. Inflation is expected to rise above the 2 per cent target next year, and Bunge said a gradual adjustment of monetary policy is important to allow for evaluation of each step, with future increases having to account for household sensitivity to interest rates. m:…5360

The forces pushing Swedish inflation up are familiar ones. Bunge pointed to geopolitical tensions, energy market disruptions and the krona's weak performance as contributors to the assessment that inflation will rise above the 2 per cent target, and said October's inflation figure was lower than the Riksbank's forecast. The Federal Reserve, meanwhile, did not intervene in foreign exchange markets during the July - September 2026 quarter, while the U.S. Treasury purchased Japanese yen in the foreign exchange markets during the third quarter of 2026, and the U.S. dollar index was little changed on net during the third quarter of 2026. m:…5360 m:…2937

The dollar's quiet quarter hides movement underneath. The dollar depreciated against the Korean won, Japanese yen, and Chinese renminbi during the third quarter, and appreciated against the euro and Mexican peso during the third quarter. Dollar movements were broadly consistent with changes in front-end U.S.-advanced foreign economy interest rate differentials, according to the New York Fed's report, which ties the currency story back to the same rate decisions the central banks are making one by one. m:…2937