The National Bank of Romania’s (BNR) Board of Directors decided on Thursday to maintain the key interest rate at 1.75 per cent per year and to lower the mandatory minimum reserve requirements for forex-denominated liabilities by two percentage points to 12 per cent starting in the January 24 – February 23 period, a press release shows. Likewise, BNR’s Board of Directors decided to maintain the mandatory minimum reserve requirements for RON-denominated liabilities at 8 per cent, and to properly manage liquidity within the banking system.
The members of the Romanian Association of Financial-Banking Analysts (AAFBR) were expecting the decision to maintain the monetary policy interest rate, but were wrong in what concerns the mandatory minimum reserve requirements for forex-denominated liabilities as shown by an internal AAFBR survey quoted by Agerpres.
“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 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 survey showed.
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.