Romania’s central bank keeps key interest rate at 2.5 pct in line with expectations

The National Bank of Romania (BNR), Romania’s central bank, decided on Tuesday to maintain the monetary interest rate to its current level of 2.5 percent for the fifth time in a row, in line with economists’ expectations.

On May 7, 2018, the central bank raised the monetary interest rate from 2.25 percent to 2.5 percent, the highest level since February 2015, as a consequence of upward revision of the inflation forecast.

“In its meeting of 8 January 2019, the Board of the National Bank of Romania decided the following: to keep the monetary policy rate at 2.50 percent per annum; to leave unchanged the deposit facility rate at 1.50 percent per annum and the lending facility rate at 3.50 percent per annum; to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions,” the central bank said in a press release.

Central bank’s decision was expected by the economists.

“We don’t expect any key rate change but will be watching for remarks about a shift in the comfort range for the EUR/RON,” ING Bank analysts said in a research note.

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Romania’s annual inflation rate soared to 5.4 percent in May and June 2018, the highest rate since June 2013, but slowed 3.4 percent in November.

The current BNR forecasts show inflation hitting 3.5 percent at the end of last year and 2.9 percent in December 2019.