Romania's key interest rate remains at 1.75 percent

BNR decides to maintain Romania’s key interest rate at 1.75 pct

Newsroom 05/05/2016 | 15:13

The board of the National Bank of Romania (BNR) decided on Thursday to maintain the key interest rate at 1.75 percent.

Following today’s meeting, the central bank has also decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.

“Market expectations for more ECB easing by the September meeting is likely to keep NBR in expectative, delaying first policy action in Romania to the 4 November meeting in our view. We recently revised down our inflation forecasts for end-2016 and end-2017 from 1.3 percent and 3.5 percent to 0.0% and 2.7 percent, respectively. Materialisation of our forecast would allow the NBR to avoid negative real interest rates by gradually narrowing the corridor and tightening the liquidity control, implicitly avoiding credibility costs, before the first key rate hike expected by us in 2Q17,” said ING Bank analysts.