National Bank of Romania Confirms Paused Policy

March 28, 2014

Romania’s monetary policy rate had been reduced by a total of 175 basis points since mid-2013 including a cut of 25 bps in February when officials hinted that easing might then be paused.  This indeed is the case.  After this month’s meeting, officials retained the record low 3.5% interest rate and did not change reserve requirements either.  A released statement observes a pickup in economic activity, projects inflation settling within the 2.5% target, and defines the its goals: “The monetary policy conduct is aimed at sustainably preserving price stability over the medium term in line with the 2.5 percent flat annual target, while also paving the way for the sustainable recovery of lending supportive of balanced and lasting economic growth.”  The next monetary policy review will be on May 6.  Prior to mid-2013, the National Bank of Romania’s key interest rate was cut by 225 basis points in 2009, 175 bps in 2010, 25 bps in 2011 and 75 bps in 2012, bringing such from 10.25% down to 5.25%.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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