Interest Rate in Romania
Romania - Interest Rate
Central Bank holds rates unchanged at its first 2019 meeting
At its first monetary policy meeting of the year, held on 8 January, the National Bank of Romania (NBR) kept the policy rate unchanged at 2.50%. The Bank also left the deposit facility rate unchanged at 1.50%, the lending facility (Lombard) rate at 3.50% and the reserve requirement on both leu- and foreign-currency denominated liabilities unaltered.
A notable moderation in both headline and core inflation, combined with softening growth, drove the NBR’s decision. Headline inflation dropped to 3.4% in November from October’s 4.3%, due to lower energy prices and favorable base effects, moving within the Bank’s target range of 1.5%–3.5% for the first time in 2018. Core inflation also eased slightly, again influenced by softer growth in international agri-food prices.
Meanwhile, national accounts for the third quarter showed that growth ticked up. However, the slight acceleration was the result of a surge in inventories, which came amid falling fixed investment, cooling consumer spending and a deterioration in the external sector. Available figures for Q4 suggest that economic activity slowed in the quarter, due to soft growth in industrial output and falling construction production; heading into 2019, the economy could be further weakened by capital outflows and companies revising capital investment plans following a series of tax increases adopted by the cabinet at the end of December.
The NBR expects inflation to decline further and thus remain below the upper band of the range in the next few months. The Bank stated that risks to the outlook stem mainly from the pace of growth in the EU and in the global economy, the government’s income and fiscal policy stance as well as the measures contained in the still pending 2019 budget. In its communiqué, the NBR noted that it will aim to secure price stability in the medium-term as a condition for sustainable economic growth, and once more called for structural reforms to improve the country’s macroeconomic fundamentals.
The next monetary policy meeting is scheduled for 7 February.
Romania Interest Rate Forecast
FocusEconomics Consensus Forecast panelists expect the policy rate to end 2019 at 3.04% and 2020 at 3.47%.
Romania - Interest Rate Data
|Policy Interest Rate (%)||4.00||2.75||1.75||1.75||1.75|
5 years of economic forecasts for more than 30 economic indicators.
Romania Interest Rate Chart
Source: National Bank of Romania.
|Bond Yield||5.11||0.23 %||Jan 16|
|Exchange Rate||4.11||-0.34 %||Jan 16|
|Stock Market||7,077||-0.59 %||Jan 16|
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January 14, 2019
Industrial output grew 2.6% in annual terms in November, below October's 3.5% expansion.
January 14, 2019
Consumer prices rose 0.2% over the previous month in December, contrasting November’s 0.1% month-on-month decline.
January 8, 2019
At its first monetary policy meeting of the year, held on 8 January, the National Bank of Romania (NBR) kept the policy rate unchanged at 2.50%.
December 12, 2018
Consumer prices dropped 0.1% over the previous month in November, contrasting October’s 0.5% increase.
December 12, 2018
Industrial output expanded 3.5% in annual terms in October, well above September's 0.5% growth rate, which had marked the weakest record in 17 months.