BNR might reduce benchmark rate to 6 pct (analysts)
In its March 30 meeting, BNR cut the annual benchmark rate from 7.00 to 6.50 percent. The Central bank attempts to determine a reduction of the rates on the market applied by the commercial banks, but very few of them followed suit. In its March meeting the Board decided to keep the current level of the mandatory minimum reserve applicable to lei and foreign currency liabilities of the credit institutions.
In its report on board meeting in March BNR pointed out that it „promoted a cautious monetary policy set to secure the inflation convergence with the medium-term established goals, as well as the normalization of the rates on the monetary market and in the banking activity, pursuing the consolidation of favorable conditions for a sustained revival of the crediting process and a steady re¬launch of the economic activity”.
Following the decision to cut the benchmark rate to 6.50 percent, BNR Board also decided that starting March 30,2010, to cut the rate for deposit facilities to the level of 2.50 percent per year from 3.0 percent and a cut of the rate charged by a central bank for very short term loans to other banks (Lombard) to 10.50 percent per year from 11.00 percent. At the same time, the penalizing rate for a deficit in the mandatory minimal reserve in lei was diminished to 15.75 percent, starting with the applicability period April 24 – May 23, 2010.