Romanian Ctrl Bk To Gradually Ease Monetary Policy

Publish date: 04-02-2009
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The National Bank of Romania, or BNR, will cut the key rate in several steps, of 0.25 percentage points, along with reductions in the minimum required reserve ratios, Lucian Anghel, chief economist within Romanian largest bank BCR, said Tuesday.

"One could see cuts in small steps, of 0.25 percentage points, but BNR will keep all the time a differential of at least 3 percentage points between the monetary policy rate and the inflation," Anghel said.

Romanian central bank decided to keep the key monetary policy interest rate at 10.25%, in its last board meeting early January. It also kept the minimum required reserves ratio on both leu-denominated and foreign currencies liabilities of credit institutions at 18%, and 40%, respectively.

BNR's Board will have a monetary policy meeting on Wednesday, February 4.

Anghel said that, without a graduate decrease in interest rates, Romanian economy cannot recover, following the lending slowdown in the last months of 2008.

"The Romanian economy cannot function with a single-digit lending growth," he said. Anghel forecasts the central bank will ease the monetary policy starting with Wednesday's meeting.


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