Stiri	Stiri afaceri	Stiri companii	Evenimente de afaceri

Romania Central Bank keeps key rate at 6.25%

The National Bank of Romania's (BNR) Board of Directors on Thursday decided to keep the key interest rate at 6.25 percent per annum, to keep the current levels of the minimum mandatory reserve rates applicable to national leu currency and forex liabilities of the lending institutions as well as to properly manage the banking system liquidity.

According to a BNR release, the Board examined and approved the Quarterly Report on inflation, with the document to be unveiled the public at a news conference on Feb. 7, when the bank will also announce the calendar of its money policy meetings to be held in the next 12 months.

Central Bank explains monetary policy decision

The Administration Board of the National Bank of Romania decided on Thursday to maintain the key interest rate at the historic lowest value of 6.25% for the sixth consecutive meeting, explaining that the monetary policy strategy should remain prudent.The annual inflation rate climbed to the level of 7.96% at the end of 2010, in line with prognoses of the central bank, but significantly over the top limit of variation interval around the target.

The increase of the annual inflation rate in 2010 (from 4.74% in December 2009) was mainly the consequence of the increase of the standard VAT share, together with adverse influences of price evolutions for food and fuel at world level, BNR explains.BNR estimates that resuming the disinflation process will begin this year and will continue when first round effects generated by the increase of VAT will dissipate.

'This involves a configuration of the overall monetary conditions for a firm anchorage of inflation anticipations, to thwart the risk of second round effects of inflation shocks,' a BNR press release shows.The BNR Administration Board also said there are risks outside the area of influence of the central

Bank which impose keeping a prudent monetary policy. These risks are:

- adjusting administrative prices

- continuing fiscal consolidation and structural reforms

- future evolution of foreign prices for raw materials and foodstuff, and that of the international environment.

The BNR Administration Board decided to maintain a monetary policy interest rate at 6.25% and to continue the adequate cash management in the banking system. The central bank also decided to maintain present levels of lowest compulsory reserve rate applicable to passive assets in lei and foreign exchange owned by credit institutions.

Sursa: http://www.actmedia.eu

Tags: policy monetary inflation board bnr central