Central Bank to cut interest rate

The Board of Directors of the National Bank of Romania (BNR) will cut the key-interest rate by just 0.25 per cent during its meeting today, the last of 2009, according to ‘Ziua’ daily. Analysts the mounting political tensions have put pressure on the exchange rate, while also posing the risk of delaying the next instalment of the loan from the IMF. They also say it’s quite possible that key-interest may remain 8 per cent. At the same time, cash shortages have boosted inert-bank interest rates, significantly decoupling them from the key-interest rate. ‘BNR will cut the key-interest rate by 0.25 percentage points demonstrating prudence at a time of turbulence’, said Raiffeisen Bank Chief Economist Ionut Dumitru, who also expects the minimum requirements for foreign currency liabilities to be also cut by five percentage points to 25 per cent and the minimum requirements for local currency liabilities to be preserved at the current level of 15 per cent.

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