BNR monetary policy interest rate down 0.5 pc

The Board of Administration of the National Bank of Romania (BNR) decided yesterday to cut 0.5 percentage points the interest rate of the monetary policy, from 8.5 per cent to 8 per cent per year, starting on September 30, informs a press release remitted to the editorial office.

Thus, the bank has operated the fifth decline this year, in compliance with the expectations of the analysts. The Central Bank has also decided to maintain the current levels of the minimum compulsory reserves applicable to the liabilities in RON and foreign currency of the credit institutions.

"BNR will continue to carefully monitor the internal evolutions and those of the international economic circles, in order to assure, through its adequate instruments, the achievement and maintenance of the stability of the prices on medium term and of the financial stability," the communique shows.

The economic analysts have anticipated BNR's decision and stressed that this reduction of the monetary policy interest rate by 0.5 percentage points is necessary for the re-launching of the economic activity, through the reduction of the credit installments. Thus, Volksbank chief economist, Melania Hancila, declared that this decision of BNR matches the expectations of the market and is a confirmation of the fact that the central bank will continue to cut the monetary policy interest rate, The Money Channel informs. According to her, the level of the monetary policy from the end of 2009 will be around 7.5 per cent.

Ionut Dumitru, chief economist of Raiffeisen Bank Romania, also declared that concurrently with the reduction of the monetary policy there are chances for us to match the upper limit of BNR's inflation target. He also stressed that at the beginning of the next year we shall see a falling inflation, which will implicitly conduct to the fall of the interest rates. On another hand, Nicolae Chidesciuc, chief economist ING Bank, pointed out that he expects a reduction by 5 per cent of the RMOs for liabilities in foreign currency.

New BNR Vice-Governors

The president of the Commission on budget-finance from Senate, the Democrat-Liberal Ion Ariton, declared yesterday for Mediafax that the hearings for BNR Board of Administration were deferred because PNL withdrew its proposal for a member in the Board. Ion Ariton mentioned that through the withdrawal of the proposal by PNL, procedurally the hearings cannot take place any longer.

He mentioned that after the settling of this problem, a new deadline will be set for the hearings by the specialized commissions of Parliament. On another hand, sources from PSD declared that the PSD MPs from the commissions were informed by the leadership of the party that the hearings regarding BNR Board must be postponed, on the background of the crisis of the coalition, until Dan Nica is reinstated in the office of minister and vice premier. The Liberals also targeted a position of vice governor for Daniel Daianu, but this proposal was rejected by PSD and PDL at the negotiations.

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