Romania: Central Bank cuts interest rates for the second consecutive time
January 5, 2012
At its 5 January meeting, the National Bank of Romania (NBR) cut the monetary policy rate by 25 basis points to a record low of 5.75%, marking the second consecutive rate cut. The move was expected by market analysts, as low inflationary pressures allow the Bank to stimulate economic activity in the midst of the protracted Euro area debt crisis. The Bank commented that the economy continues to recover, underpinned by favourable exports, as well as industrial and farming output, although uncertainties regarding global and European growth cloud the short-term outlook for the Romanian economy. Against this backdrop, the NBR Board noted that the gradual adjustment of monetary conditions will not only help resume robust economic growth, but also boost domestic savings, including the aim to support a sustainable external deficit and a lower dependence on external financing.