BELGRADE, Nov 5 (Reuters) - Serbia's central bank cut on Thursday its key policy rate by 100 basis points to 10 percent, a day after pledging further policy easing on improved inflation outlook.

The cut in the two-week repo rate, the bank's seventh move on rates in 2009, was announced a day after the International Monetary Fund and the Serbian government agreed the country's 2010 fiscal policies and measures to limit next year's fiscal deficit to 4 percent of GDP.

The central bank last cut the repo rate on Oct. 8, citing tame price pressures and the stable dinar. Governor Radovan Jelasic will detail the decision at a 1000 GMT news conference.

(Reporting by Gordana Filipovic; Editing by Mike Peacock) Keywords: SERBIA RATES/

(gordana.filipovic@thomsonreuters.com; +381 11 3044 914; Reuters Messaging: gordana.filipovic.reuters.com@reuters.net)

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