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Analysts expect key interest to be raised by up to five percent

Opinions on the decision the National Bank of Romania (BNR) will make in its monetary policy council, on Wednesday, are mixed. While most analysts expect a 0.5 percent increase in the key interest rate, there are also voices which claim BNR will operate no changes.

They argue that such an increase will have no impact on the national currency, as it is already included in the price. ING, Raiffeisen and Credit Europe believe the monetary policy interest rate may reach a peak of 10 percent in 2008, as the inflation rate may exceed 8.5 percent in the coming months. In exchange, Romanian banks such as BRD, Millenium Bank and Romexterra expect BNR not to modify the key interest. Independent analysts Dragos Cabat and Ilie Serbanescu believe BNR should not increase the monetary policy interest rate, but rather wait and see the effects of recent increases. Since the market expects an interest increase, a slight depreciation of the national currency is possible in case this does not take place, argues Florian Libocor, BRD senior economist. BNR raised the key interest on October 31, 2007, on January 7 and February 4. The rate reached nine percent in February, vs. seven percent in late October. Sursa: http://www.rompress.ro

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