Interest Rate in Romania
Romania - Interest Rate
NBR stays put despite new hawkish tilt
On 15 May, the National Bank of Romania (NBR) kept the policy rate unchanged at 2.50%, while also leaving the deposit facility rate at 1.50%, the lending facility (Lombard) rate at 3.50% and maintaining the reserve requirements on both leu- and foreign currency-denominated liabilities. Most analysts had expected as much.
Policymakers were reluctant to hike rates despite higher inflation in recent months (April: 4.1%). Despite rising headline and core measures, they felt no urgency to act given that, in their view, the recent spike has been due to a number of transitory factors. In the NBR’s accompanying inflation report, policymakers projected that headline inflation would remain outside its 1.5%–3.5% target band through the end of the year before settling somewhere within it next year.
Governor Mugur Isarescu voiced hawkishness and noted that monetary tightening would soon be on the horizon. He noted, however, that the NBR’s preferred tool to implement it would be liquidity management rather than rate hikes. Although this would minimize the NBR’s spread with the European Central Bank, analysts were skeptical that it would be sufficient to contain inflation over the short-term—especially given the government’s loose fiscal policy.
Policymakers will meet again on 4 July.
FocusEconomics Consensus Forecast analysts expect the NBR to hike rates by year-end; they see the policy rate at 2.78% by end-2019 and at 3.08% by end-2020.
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||4.71||0.23 %||Jun 14|
|Exchange Rate||4.19||-0.34 %||Jun 14|
|Stock Market||8,504||-0.59 %||Jun 14|
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May 29, 2019
Romania’s economy grew 5.0% year-on-year in the first quarter, according to a preliminary estimate released by the Statistical Institute on 15 May.
May 15, 2019
On 15 May, the National Bank of Romania (NBR) kept the policy rate unchanged at 2.50%, while also leaving the deposit facility rate at 1.50%, the lending facility (Lombard) rate at 3.50% and maintaining the reserve requirements on both leu- and foreign currency-denominated liabilities.
May 14, 2019
Industrial output declined 0.2% on an annual basis in March, contrasting the 1.9% year-on-year rise in February.
May 13, 2019
Consumer prices increased 0.6% from a month earlier in April, up from the 0.5% month-on-month increase in March.
April 8, 2019
A second estimate released on 8 April by the Statistical Institute (INSSE) confirmed that the economy grew 4.1% in the fourth quarter over the same period a year earlier, a notch below the third quarter’s 4.2% expansion.