Romanian central bank keeps monetary policy interest rate flat at 3.5%

By bne IntelliNews May 7, 2014

Romania’s central bank kept unchanged the monetary policy interest rate at 3.5% at its May 6 monetary policy board meeting, which was in line with the expectations of bank experts. Also in line with expectations, the monetary authority kept unchanged the minimum reserve requirements – at 12% for local currency liabilities and at 18% for foreign currency liabilities.

The central bank also announced that it would pursue an adequate liquidity management in the banking system.

A poll of bank analysts conducted last week revealed their expectations for steady monetary policy interest rates by the end of 2014 and possibly even by the end of next year. Experts also believe that the central bank would cut the minimum reserve requirements by some 2pps from the current levels by the end of 2015.

The central bank expects the marginal shift from foreign currency to local currency lending, seen in the share of forex loans shrinking from above 60% to 59.5% for a first time in five years, to increase the efficiency of the monetary transmission mechanism.

The improvement in the economic activity in Romania has further been fostered by the exports' growth and the favourable performance of the industrial sector, as well as by the gradual consolidation of consumption, the central bank concluded.

External and internal balances have consolidated, the monetary authority also says. Looking at the external sector, the current account and the international reserves remain in a comfortable zone, while a substantial part of Romania’s external public debt has been repaid. The domestic price stability is visible in the central bank’s expectations for the headline inflation to remain within the target band in the coming two years.

Related Articles

EU to fund feasibility study on Slovakia’s proposed Eastring gas link to Balkans

The EU has agreed to help fund a feasibility study on the Eastring pipeline project, which would link Slovakia to the Balkan markets, Slovak transmission system operator Eustream announced on May 26. ... more

IMF recommends fiscal consolidation for Romania

The International Monetary Fund (IMF) has estimated that the fiscal policies envisaged by Romania will result in a wide deviation (of over 2% of GDP) from the optimum 1.5% of GDP medium-term budget ... more

Owner of Romania’s Dedeman reportedly close to signing largest ever deal in the Romanian office segment

Dragos Paval, owner of Romania’s biggest DIY retailer Dedeman, is reportedly close to signing an agreement with Africa Israel Investments for the acquisition of an office building project in ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Dismiss