Unchanged Romanian Central Bank Rate

May 3, 2011

The National Bank of Romania as anticipated left its key interest rate at 6.25%, the level since May 2010.  The last rate change, a cut of 25 basis points, was undertaken a year ago in May 2010 and culminated a series of nine reductions implemented from February 2009 and adding up to 400 basis points including four cuts totaling 175 basis points at the four initial meetings of 2010.  Reserve requirements on foreign currency-denominated deposits, which had been cut to 20% from 25% at the last meeting on March 31, were not reduced further this time.  Officials have been trying to balance the needs to maintain adequate market liquidity and thereby encourage growth, which has been weak, with the need to contain higher inflation.  When the last final easing was made a year ago, inflation was barely above 4.0%, but it was above 7.0% earlier this year.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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