Romania’s central bank announced on Thursday that it decided to keep its monetary policy rate unchanged at 7%, according to See News.
The central bank, BNR, also decided to maintain the lending facility and deposit facility rates at 8% and 6%, respectively, it said in a statement following a board meeting on monetary policy.
The existing ratios of minimum reserve requirements for both Romanian leu and foreign currency-denominated liabilities of credit institutions will also remain unchanged.
The decisions aim to bring the annual inflation rate back in line with the 2.5% ±1 percentage point flat target on a lasting basis by anchoring inflation expectations over the medium term, in a manner conducive to achieving sustainable economic growth, the BNR said.
Romania’s annual inflation rate inched down to 16.37% in December from 16.76% in November, edging above the forecast, mainly driven by lower fuel prices amid the decline of crude oil prices and the appreciation of the Romanian leu against the US dollar.
Based on its current forecast, the BNR sees the annual inflation rate declining to one-digit levels starting with the third quarter of 2023, almost three quarters earlier than in its prior forecast. Annual inflation is seen to end the year below the previously-anticipated value. During the second half of 2024, the deceleration is projected to slow down, with the annual inflation rate remaining slightly above the variation band of the target at the end of the projection horizon.
The newest statistical data confirmed a higher-than-expected economic growth of annual 3.8% and quarterly 1.2% during the third quarter of 2022, with the latest analyses pointing towards a gradual economic slowdown in the fourth quarter of 2022 and the first quarter of 2023, under the impact of the war in Ukraine, the BNR said.
The BNR last changed its key rate on January 11, increasing it from 6.75% to 7.00%.
The central bank will hold its next monetary policy meeting on April 4.