Central bank keeps key rate at 5.25 pct per annum

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The National Bank of Romania’s (BNR) Board of Directors decided to keep the monetary policy rate at 5.25 percent per annum, the institution said in a release to Agerpres.

 During the meeting held on Jan. 7, 2013, the Central bank directors also decided to adequately manage the bank system liquidity, maintain the current levels of the minimum compulsory reserves rates applicable to the leu- and forex liabilities of the crediting institutions.

‘The National Bank of Romania will closely monitor the domestic developments and the developments of the international economic environment so as, by the proper adjustment of the instruments it has available, it should ensure the achievement of medium-term stability of the prices and financial stability as well. The analysis of the latest developments in the macro-economic indicators reveals a disruption in the upward trend of the annual inflation rate, as well as a sluggish recovery of the Romanian economy amid the euro zone recession.

The annual inflation rate slid to 4.56 percent in November 2012 compared to last year’s peak of 5.33 percent recorded in September, thus confirming the gradual dissipation of the inflationary effect on certain factors as regards the offer. The annual adjusted CORE 2 inflation stood at 3.3 percent in November 2012. The modest dynamics of the industrial production and the retail trade, as well as the lingering euro zone economic recession, to have serious effects upon the Romanian exports, explains the persistence of the aggregate demand deficit. At the same time, similar to the economic developments in the majority of the EU-member states, the credit granted to the private sector begins to move downwards. Its components uncover divergent developments, with the forex credit revealing slower dynamics,’ the release reads.

According to the BNR officials, the monetary policy stance remained prudent with a view to anchoring expectations as regards inflation and achieving the objective of keeping the inflation rate around the target in the medium term.

The release also says that ‘these decisions are aimed at resuming and reinforcing the disinflation process, whose outlook keeps being marked by risks and uncertainties related to the domestic developments, including to the persistence of structural rigidities in the Romanian economy, as well as the process aimed at re-launching the euro zone and global economies.’

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