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BRD anticipates cuts of key interest rate in November

BNR may cut down the monetary policy interest rate by 0.25 points in its November meeting, from 6.25% to 6% and in 2012 by another 0,5 points, to 5.5% a prudent attitude even if inflation gets down within the targeted interval, according to BRD Groupe Societe Generale, Mediafax writes.

'Inflation is the best news this year, although nobody expected this return and the BNR target night be reached. A 3.5% inflation will not bring great monetary policy changes. This level must be consolidated first,' said Florian Libocor, the senior economist of BRD Groupe Societe Generale.

According to the macroeconomic report of BRD, inflation will be 3.8% at the end of the year and will get down to 3.6% in 2012 and 3% in 2013.'If things progress in the present trend, BNR could make a decision on 2 November by reducing the monetary policy by 0.25%which should convey confidence in economy both to firms and the population. After that it is possible to see a new reduction of the minimum compulsory reserve rate,' Libocor said.

Monica Croitoru, the macroeconomic analyst of BRD said that in the conditions of 3.5% inflation in 2012 and an economic policy rate of 5.5% per year, the real interest of 200 basic points remains high in the context of a country with investment rating , which will make state bonds issued by Romania attractive.

BNR decided in September to maintain the monetary policy interest at 6.25% per year and the level of minimum compulsory reserves. The central bank has not modified the monetary policy interest rate since 4 May 2010, when it reduced the rate by 0.25 points to the historic minimum of 6.25%. In the first four monetary policy sessions of 2010, BNT dropped the interest by 1.75% from 8%.

Consumer prices dropped in September for the fourth month on a row, on the background of cheaper food, so that annual inflation got down to 3.45%, the minimum level after 1990 and got into the BNR target for this year.

BNR governor Mugur Isarescu declared two weeks ago, at Romania Financial Forum 2011 that the annual inflation rate dropped under 4% in September and reached the central bank target.

Sursa: http://www.actmedia.eu

Tags: policy inflation monetary bnr interest november brd

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