Romania will probably refrain from raising interest rates further as the central bank expects price growth to ease in the coming months, Bloomberg reports.
Policymakers in Bucharest will hold the benchmark rate at 7%, according to all economists in a Bloomberg survey. The rate is set to stay put for a second meeting after 11 hikes brought borrowing costs to the highest level since 2010.
The bank has yet to call the end of the monetary tightening cycle, with some members of the rate-setting board pointing to persistent inflation risks in the global economy.
Governor Mugur Isarescu has signaled that rates will remain unchanged until inflation comes close to the current level of the benchmark rate.
Price growth in the largest Balkan country is expected to ease to 7% this year, from 15.5% in February, according to the central bank’s most recent forecast.
Romania’s approach resembles policy tactics in regional peer Czech Republic, where the central bank projects a similar inflation path this year and the benchmark rate has stayed unchanged since last summer.
“We believe that the key rate-hiking cycle has been concluded at 7%, although the central bank has not announced it yet,” said Andreea Elena Draghia, a Bucharest—based economist at Raiffeisen Bank.
With inflation remaining high this year, the central bank will probably keep rates unchanged until the second quarter of 2024, when it may begin easing its monetary policy, she said.
