Romania buildings

Romania Monetary Policy August 2018

Romania: Central Bank holds rates unchanged at August meeting

At its monetary policy meeting on 6 August, the National Bank of Romania (NBR) decided to keep the policy rate unchanged at 2.50%. Moreover, the Bank decided to leave the deposit facility rate unchanged at 1.50% and the lending facility (Lombard) rate at 3.50%. Meanwhile, the reserve requirement on both leu- and foreign-currency denominated liabilities was left unaltered.

Moderating core inflation and a significant deceleration in growth underpinned the NBR’s decision. Headline inflation stabilized in June at 5.4%, remaining well above the upper band of the Bank’s target range of 1.5%–3.5%, where it has been for six consecutive months. However, core inflation eased slightly, influenced by softer growth in international food prices. Moreover, figures on industrial and construction production, along with retail sales for the second quarter, suggest that economic growth has settled into a slower pace since the beginning of the year. As domestic demand cooled, the Bank assumes prices will be subject to more moderate inflationary pressures.

The NBR expects inflation to stay above its target range in the coming months then decline to near the upper band of the range by the end of the year. The Bank stated that risks to the outlook stem mainly from administered prices, future wage dynamics and the fiscal stance pursued by the government. In its communiqué, the NBR declared it will secure price stability, which it sees as a condition for sustainable economic growth and called for structural reforms to strengthen the country’s productive capacity and achieve sustainable growth.

The next monetary policy meeting is scheduled for 3 October.

Romania Interest Rate Forecast

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest