Key interest rate remains at 3.5 pc per annum

The Board of the National Bank of Romania (BNR) decided yesterday to maintain the monetary policy rate at 3.5 per cent per annum, the central bank announced in a release.
According to the cited source, in its May 6 meeting, 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 pursue an adequate liquidity management in the banking system.
Also, BNR has downwardly adjusted from 3.5 to 3.3 per cent the end-2014 inflation projection and it did the same for the end-2015 inflation projection, BNR Governor Mugur Isarescu said yesterday. Similarly to the previous assessments, the risks associated with this outlook stem primarily from external sources, namely the variability of investors’ risk appetite over the short and medium term in relation to emerging economies as a whole amid the recent geopolitical and regional tensions, the ongoing cross-border deleveraging across the banking system and the effects of monetary policy stance adjustments by major central banks.
The latest macroeconomic data underscore the inflation rate sticking to low levels, in line with central bank projections. This development was further underpinned by fundamentals, namely the persistence of the negative output gap and the maintenance of inflation expectations inside the variation band of the target. One-off factors and developments in other indicators, including industrial producer prices, point to further moderate inflationary pressures.In March 2014, the annual inflation rate fell to 1.04 per cent from 1.55 per cent in December 2013.

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