BNR expected to cut key rate to 2.75 percent on Tuesday

Romania’s central bank might cut the key rate to 2.75 percent in its Tuesday monetary policy board meeting, while keeping requirement ratio for leu deposits unchanged, according to a survey of the association of financial and banking analysts AAFBR.

BNR’s board cut the key rate at the end of September by 0.25 points, from 3.25 pct to 3 pct and also reduced the rates for leu denominated RMO, from 12 to 10 percent. RMO on currency loans was maintained at 16 percent.

Central Bank Governor said at the time that BNR will thoroughly analyze any further rate cut, as the evolution of inflation over a medium term is still uncertain, but the reduction of minimum requirements will continue.

Analysts believe the monetary relaxations process will continue in 2015 “when the key interest rate might be cut back to 2.5 percent in December”.

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