The National Bank of Romania (BNR) could profit from a slowdown in inflation to cut the key interest rate by 0.25 pc, from 6 pc to 5.575 pc, despite the risks generated by the euro zone crisis, Mediafax reported Reuters consultants to have said. Six of the 11 analysts consulted expect an interest cut of 0.25 pc, while the remaining five estimate the central bank will maintain the rate at its current level of 6 pc, given euro zone risks and the still-weak RON.
Separately, BNR currency reserves rose nearly EUR 1.5 bln in December, amid hard currency inflows from the World Bank (WB) and the European Commission (EC), and stood at EUR 33.2bln at the end of last year, slightly up, from EUR 32.4bln year-on-year. Hard currency reserves saw little wavering during 2011, staying by and large at slightly over EUR 32 bln, save for November, when it reached a EUR 31.74 bln low, after several months during which dealers suspected the central bank of repeated interventions on the currency market to prop up home currency. Currency reserves reached an yearly peak of EUR 34.4 bln in June, on the strength of Eurobonds worth EUR 1.5 bln sold by the Ministry of Public Finance that month. In December of last year, the BNR reported hard currency inflows matching EUR 2bln, from the European Commission, into the Finance Ministry accounts, and also from the World Bank, third tranche of EUR 400 M, modifying the minimum hard currency reserves required of credit institutions, revenues from the handling of international reserves and others. The appreciation of the US dollar, the Japanese yen and the British pound against the euro also contributed to an increase in international reserves. Also last December, outflows totalled EUR 545 M, consisting in changes in the minimum reserves required of credit institutions, payments of instalments and interest into the hard currency public debt account and others. The gold reserves stayed put at 10.3.7 tons. Amid international price developments, the gold reserve equalled EUR 4,058 M, up nearly EUR 500 M against late 2010. Romania’s international reserves (hard currencies and gold) on December 31, 2011 stood at EUR 37.25 bln, from EUR 36.02 bln on Nov 30, 2011 and EUR 35.9 bln in late 2010. Hard currency payments due in January 2012, direct or guaranteed by the Ministry of Public Finance, into the public debt account total EUR 142 M.