Romania: Central Bank keeps monetary policy rate unchanged
May 6, 2014
At its 6 May meeting, the National Bank of Romania (NBR) decided keep the monetary policy rate on hold at 3.50%, which met market expectations. In addition, the NBR decided to maintain the current levels of the minimum reserves requirement on both leu- and foreign currency-denominated liabilities of credit institutions.
According to the NBR, the economy has gained momentum recently as it has been underpinned by growth in exports and an improvement in industrial production. However, the Bank pointed out that, “the risks and uncertainties relate to the persistence of structural rigidities across the Romanian economy, which calls for fast-paced reforms”, referring here to the reforms agreed in the Stand-By Arrangement (SBA) that the country reached with the International Monetary Fund (IMF).
Regarding price developments, NBR stated that the inflation rate has been in line with the Bank's projections. By keeping the monetary policy rate on hold, the NBR aims to keep consumer prices under control over the medium term at a figure that is in line with the Bank's target of 2.5%.
FocusEconomics Consensus Forecast panelists expect the policy rate to be 3.56% in 2014. For 2015, the panel foresees the rate closing the year at 3.92%.
Author: Dirina Mançellari, Senior Economist