Romania: Central Bank cuts the monetary policy rate
November 5, 2013
At its 5 November meeting, the National Bank of Romania (NBR) decided to cut the monetary policy rate by 25 basis points. The decision to cut the policy rate from 4.25% to 4.00% was in line with what the market had expected and marks the fourth consecutive rate cut by the Bank. In addition, the NBR decided to maintain unchanged the current level of minimum reserve requirement ratios on both foreign exchange and the leu.
According to the Bank, inflation is expected to moderate in the coming months mainly due to a significant fall in food prices and a diminishing base effect. The latest monetary policy decision, "paves the way for the revival of sustainable lending, restoration of confidence and the support provided to economic growth." The next monetary policy meeting is scheduled for 8 January 2014.
FocusEconomics Consensus Forecast panelists do not expect the Central Bank to cut interest rates further this year, resulting in an average year-end forecast rate of 4.66%. For 2014 the panel foresees the rate closing the year at 4.64%.
Author: Dirina Mançellari, Senior Economist