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January 18, 2022

Will BNR maintain the key interest rate unchanged?

The National Bank of Romania (BNR) could maintain the key interest rate at 1.75 per cent at the first Board of Directors meeting this year, a meeting scheduled today, January 7, according to the opinions expressed by the participants to an internal survey carried out within the Romanian Association of Financial-Banking Analysts (AAFBR).

“Most of the respondents believe that minimum reserve requirements for both RON-denominated and forex-denominated liabilities could be maintained on January 7. The monetary policy could be relaxed in 2016 only by lowering of the minimum reserve requirements for RON-denominated liabilities to 6 per cent in December 2016 and to 12 per cent for forex-denominated liabilities. Most of the respondents estimate a monetary policy interest rate at a constant 1.75 per cent throughout 2016,” the AAFBR communiqué reads.

Analysts estimate that 2017 could bring about the hiking of the monetary policy interest rate to 2.5 per cent in December.

On the other hand, the mandatory minimum reserve formation quotas’ process of convergence toward European standards could continue and most respondents estimate minimum reserves of 4 per cent for RON and 10 per cent for forex at the end of 2017.

The National Bank of Romania (BNR) decided on November 5 to maintain the key interest rate at its current level of 1.75 per cent per year. Likewise, during that meeting it was decided to maintain the current mandatory minimum reserve requirement rates for RON- and forex-denominated liabilities and to properly manage liquidity within the banking system.
AAFBR is a non-profit professional association established in January 2008. The Association brings together over 70 professionals from the banking sector, pension funds, investment funds, insurance companies and the capital market.

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