Romanian Ctrl Bk May Cut Interest Rates When Bks Solve Confidence Issues-PMPublish date: 26-11-2008
The National Bank of Romania, or BNR, might cut the key monetary policy rate the confidence issues between banks are solved, Romanian Prime Minister, Calin Popescu Tariceanu said Tuesday, adding that this decision belongs exclusively to the central bank.
Asked how he comments the possibility that the European Central Bank, or ECB, might further cut the key monetary policy rate, Tariceanu said the ECB tries to boost lending for investment.
"When the confidence issues between banks in Romania end, the central banks can analyze and decide upon reducing interest rates. So, it is very possible, but it depends on the central bank, and not on the government," Tariceanu added.
Romania's central bank decided on October 30 to keep unchanged the key monetary policy rate at 10.25% on the year and to reduce the minimum required reserves ratio on leu-denominated liabilities of credit institutions to 18% from 20%.
The Organization for Economic Co-operation and Development, or OECD, estimates that ECB could cut the key monetary policy rate at 2% until next spring, from the current value of 3.25%, in order to fight against the recession in the Euro zone, in case the economic situation continues to worsen.
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