No Change in National Bank of Romania’s 6.25% Monetary Policy Rate
January 5, 2011
Romania’s monetary policy is hand-cuffed by the conflicting problems of disappointingly low economic growth, much higher-than-targeted CPI inflation, and deficient private-sector credit growth. Central bank officials implemented nine rate reductions from February 2009 to May 2010 totaling 400 basis points but are now maintaining a “prudent” wait-and-see stance. In a new released statement, monetary officials left their key interest rate at 6.25% for the fourth meeting in a row, left reserve requirements unchanged, and pledged to keep ample liquidity in the banking sector. GDP is expected to hover between 1% and 2% this year — low for eastern Europe. CPI inflation short up in the wake of a value added tax hike six months ago and at 7.7% is more than twice as high as the mid-point of the central bank’s medium-term target of 2.5-4.5%. The next policy meeting is scheduled for February 3rd.
Copyright Larry Greenberg 2011. All rights reserved. No secondary distribution without express permission.
Tags: Romania
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