Romania Monetary Policy


Romania: Central Bank keeps monetary policy on hold

July 1, 2014

At its 1 July meeting, the National Bank of Romania (NBR) decided to keep the monetary policy rate on hold at 3.50%, which met market expectations. In addition, the NBR decided to lower the minimum reserve requirement ratio for foreign currency-denominated liabilities of credit institutions from 18.0% to 16.0%. However, it kept the ratio on leu-denominated liabilities unchanged at 12.0%.

According to the Bank, the latest economic data show that leu-denominated loans recorded faster growth, which reflected the cuts of the monetary policy rate made at the previous meetings. On the other hand, it is worth mentioning that the foreign currency-denominated loans continue to record a contraction; their share in total loans narrowed from 62.4% in June 2013 to 58.6% in June 2014. In addition, the NBR added that, “the improved perception of investors […] on the Romanian economy, due to the favorable developments witnessed by its fundamentals, has led to an increase in capital inflows, as also reflected in the domestic currency appreciation.”

Regarding price developments, NBR stated that the inflation rate has recorded low levels in the latest months, “following in the short run a lower path than previously projected.”

FocusEconomics Consensus Forecast panelists expect the policy rate to be 3.47% in 2014. For 2015, the panel foresees the rate closing the year at 3.80%.

Author:, Senior Economist

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Romania Monetary Policy Chart

Romania Monetary Policy June 2014

Note: National Bank of Romania reference rate in%.
Source: National Bank of Romania

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