National Bank of Romania Keeps Key Interest Rate at 5.25%

January 7, 2013

The NBR Policy Board did not change the monetary policy rate, which has been at 5.25% since March 29, 2012 when the last of four 25-basis point cuts over a 5-month span was announced.  Nine earlier reductions in 2009-10 totaled 400 bps.  A statement from bank officials emphasized the need for prudence in light of above-target inflation and a vulnerable and historically weak exchange rate.  Growth is weak, and a large negative output gap points to lower inflation ahead provided expected inflation stays anchored and the leu doesn’t depreciate.  CPI inflation is at 4.6% versus a target corridor of 2-4%.  The Board will next meet on February 5.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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