. e. inflation excluding food, energy, alcohol and cigarette prices, which measured 9. 5 % y - o - y in october. it is, however, important to note that core inflation remains well below headline inflation, but also lower than core inflation in some countries of the region pursuing the same monetary policy regime. a powerful deterrent of stronger core inflation growth is the preserved relative stability of the dinar exchange rate even in the conditions of globally heightened uncertainty in the international financial market. chart 9 cpi movements in selected cesee countries ( y - o - y rates, in % ) hungary romania 20. 7 poland czech republic 20. 1 18. 0 serbia 17. 2 15. 9 14. 7 14. 0 11. 8 10. 7 8. 6 9 101112 1 2 3 4 5 6 7 8 9 9 101112 1 2 3 4 5 6 7 8 9 9 101112 1 2 3 4 5 6 7 8 9 9 101112 1 2 3 4 5 6 7 8 9 9 101112 1 2 3 4 5 6 7 8 9 headline inflation core inflation inflation target tolerance band source : central banks. under the november medium - term projection, headline inflation will remain elevated until late this and early next year, but it will strike a downward trajectory thereafter. inflation is expected to decline more sharply in the second half of 2023, and retreat within the bounds of the target tolerance band in the second half of 2024. inflationary pressures will be soothed by past monetary policy tightening, anticipated waning of the effects of global factors underpinning energy and food price growth in the past period, and subdued external demand amid unfavourable global growth prospects. though they remain volatile and much higher than a year ago, the global prices of oil and other primary commodities as well as industrial raw materials have been drifting down over the past months in the face of stronger recessionary pressures worldwide, while supply chain disruptions are easing as well. in september and october, the global prices of natural gas, coal and electricity also subsided, helped by favourable weather conditions and higher than anticipated storage levels in europe. chart 10 inflation projection chart 11 movement in the key policy rate and average repo rate ( y - o - y rates, in % ) ( daily data, p. a., in % ) 5. 5 5. 0 4. 5 4. 0 key policy rate lending facilities rate deposit facilities rate average repo rate 3. 5 3.

many countries reached levels unprecedented in recent decades. thus, euro area inflation rose to 7. 5 % in april, which is its record since the bloc ’ s establishment in 1999, and in a number of central and southeast european countries it reached two ‐ digit levels. considering that in the majority of countries inflation continues to rise beyond expectations, inflation projections for the coming period are also being substantially revised up and, accordingly, central banks in these countries are carrying on with monetary policy tightening. under the impact of international movements, inflation in serbia also remained on the upward path and stood at 9. 6 % y ‐ o ‐ y in april. a fresh hike in the global prices of energy, food and raw materials chart 4 policy rates across selected countries chart 3 inflation and target in selected countries in april ( p. a., in % ) ( p. a., in % ) sources : eurostat and central banks of selected countries. * march 2022. usa uk poland romania euro area czech republic hungary turkey ( rhs ) russia ukraine czech republic poland romania bosnia and herzegovina serbia montenegro hungary euro area united states albania inflation target target tolerance band 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 sources : central banks of selected countries. pushed up import prices and stepped up cost ‐ push pressures on domestic producer prices. against such backdrop, we also witnessed growth of core inflation ( cpi excluding the prices of food, energy, alcohol and cigarettes ), which is the most affected by monetary policy measures. nonetheless, we maintained the relative stability of the exchange rate, which together with medium ‐ term inflation expectations of the financial and corporate sectors that have been anchored within the target tolerance band acted as a strong brake that kept core inflation lower than headline. in addition, according to our estimates, domestic demand and labour market conditions still do not generate stronger inflationary pressures. core inflation in serbia is lower than in the majority of countries in the region pursuing the same monetary policy regime, which is the reason why our tightening of monetary conditions in the prior period was more moderate than theirs. chart 5 cpi movements in selected cesee countries ( y - o - y rates, in % ) 13. 8 14. 2 12. 8 12. 4 10. 3 9. 6 8. 3 7. 7 5. 5 romania 1 3 9 11 1 3 1 3 2022 2021 inflation hungary czech republic 9 11 1 3 1 3 2022 2021 core inflation 9 11 1 3 1 3 2022 2021 inflation target poland 9