Monetary policy key interest rate lowered to 2.75 pc per year.\
As expected, the National Bank of Romania’s (BNR) Administrative Council has decided on November 4 to lower the key interest rate to a historic low of 2.75 per cent per year. It is a clear sign that BNR really wants to stimulate economic growth, by making it possible for bank clients to access more advantageous loans. As a result of BNR’s decision, it is expected that commercial banks will announce concrete steps in their turn too, namely the lowering of interest rates for loans, both for physical as well as juridical persons.
Here is BNR’s full communiqué:
In its meeting of 4 November 2014, the Board of the National Bank of Romania decided:
l to lower the monetary policy rate to 2.75 percent per annum from 3.00 percent starting with 5 November 2014;
lto pursue adequate liquidity management in the banking system; and
lto cut the minimum reserve requirements ratio on foreign currency-denominated liabilities of credit institutions to 14 percent from 16 percent starting with 24 November – 23 December 2014 maintenance period and to maintain the minimum reserve requirements ratio on leu-denominated liabilities at 10 percent.
With a view to mitigating interbank money market rate volatility and to consolidating the transmission of the policy rate signal, the NBR Board decided to narrow the symmetrical corridor of interest rates on NBR’s standing facilities around the policy rate to ±2.50 percentage points from ±2.75 percentage points. Thus, starting 5 November 2014, the interest rate on the NBR’s lending facility (Lombard) will be lowered to an annual 5.25 percent from 5.75 percent, while its deposit facility rate will remain at 0.25 percent per annum.
The NBR Board has examined and approved the quarterly Inflation Report, which will be released to the public in a press conference on 6 November 2014.