Romania: Central Bank makes third consecutive cut to monetary policy rate
September 30, 2013
At its 30 September meeting, the National Bank of Romania (NBR) cut the monetary policy rate by 25 basis points to 4.25%. This was the third consecutive meeting in which the Bank made a cut to the monetary policy rate. The decision was in line with market expectations. The Bank also decided to maintain the current level of minimum reserve requirement ratios on both foreign exchange and the leu.
Regarding price developments, the Bank acknowledged that inflation is expected to fall below the 2.5% target "in the forthcoming period." Nevertheless, the latest monetary easing is aimed at preserving price stability in the medium term, restoring consumer confidence and paving the way for lasting economic growth. The next monetary policy meeting is scheduled for 5 November.
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