BNR decides to keep key rate at 3.5 pc per annum


The National Bank of Romania’s (BNR) Board of Directors on Friday decided to keep the monetary policy rate at 3.5 per cent per annum, the Central Bank announced in a release. In its meeting of March 28, 2014, the BNR Board also decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions and to pursue an adequate liquidity management in the banking system, the release added. ‘The BNR Board reiterates that an adequate use of its available tools amid close monitoring of domestic and global economic developments will ensure the achievement of its main objective of maintaining price stability over the medium term and ensure financial stability’, the Central Bank stressed.
The annual inflation rate fell to a historical low of 1.05 percent in February 2014, from 1.55 percent at end-2013. At the same time, the average annual inflation rate went down to 3.2 percent in February 2014 from 3.6 percent in the previous month, while the average annual HICP inflation rate, which is relevant for ensuring comparability at European level and assessing convergence with the EU, kept declining to reach 2.6 percent in February versus 2.9 percent in January 2014. These developments and the favourable inflation outlook, amid a close monitoring of domestic and global developments, have enabled the central bank to adjust the monetary policy stance accordingly and to consolidate the monetary policy transmission mechanism, while effectively anchoring inflation expectations.
Banking system liquidity posted fluctuations, with a surplus trend being manifest, thus keeping money market rates, especially short-term rates, below the monetary policy rate. According to the announced calendar, the next NBR Board meeting dedicated to monetary policy issues is scheduled for 6 May 2014, when the new quarterly Inflation Report is to be examined.

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