BCR on Central bank cut the key rate to 7.5%

We remain however cautious with regard to a steep disinflation process this year considering the significant excise duties hikes, less favourable inflationary expectations and the chronic gap between demand and domestic supply in food products which have an important share in the consumer basket.

A "firm liquidity management" (this is the precise wording from the press release) should help money market interest rates come closer to the key rate. Further gradual cuts could be seen at the next meetings if the criteria in the IMF stand-by arrangement are met and public reforms are pushed ahead.

At the same time, monetary policy relaxation could include mandatory reserve reductions with a view to improving further the market liquidity and boosting lending to the private sector. However, the economic recovery depends now more on the strength of the rebound in major markets.