Romania raises key interest rates

Banking

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The National Bank of Romania raised its benchmark interest rate by 50 basis points to 3% at Tuesday, matching expectations and raising interest rate for the third consecutive time in a row, according to tradingeconomics.com.

The central bank also decided to hike the deposit facility rate to 2% per year from 1.5%, and increase the lending facility rate to 4% from 3.5%.

Further, the bank said that it will maintain firm control over money market liquidity and the current levels of minimum required reserve ratios for lei and foreign currency liabilities of credit institutions.

The annual inflation rate in Romania continued to rise gradually in the first two months of 2022, contrary to forecasts, to 8.35% in January and 8.53% in February, from 8.19% in December 2021.

The bank noted that the annual inflation rate is expected to rise sharply in the coming months, due to the impact of supply-side shocks triggered by the Russia-Ukraine war.

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