BNR slashes key interest rate for the second time this year

The Romanian Central Bank (BNR) has cut the key interest rate by further 0.5 percent, to 7 percent, which is applicable starting today, BNR has announced. This is the second cut of the rate this year, from 8 percent at the beginning of 2010. The bank’s administration council decided in its meeting yesterday to keep the level of mandatory reserves for local currency to 15 percent and to 25 percent for foreign currency. This is the lowest key interest rate so far, having been at the same level between June and November 2007. “While foreign investors’ perception on the Romanian economy has improved following the restart of the external financing agreement with the European Union, the International Monetary Fund and other international financial institutions, but also due to the increase in the global risk appetite, the Romanian currency has strengthen against euro,” BNR wrote. Tomorrow, the bank will also give a detailed report on inflation and the schedule of monetary policy meetings for the next 12 months.