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Romania's central bank raises key rate

Banking

Photo by Radu Bercan/Shutterstock.com

The Board of the National Bank of Romania (BNR) decided on Tuesday to raise the benchmark interest rate to 1.75% from 1.5% as of November 10, the central bank said, according to agerpres.ro.

It is the second rate-hike since May 2018. The central bank also decided to keep the deposit facility rate to 1% and raise the Lombard rate to 2.50% from 2%, it said in a statement.

The minimum reserve requirement ratios on both RON- and foreign currency-denominated liabilities of credit institutions stay unchanged at the current level. The central bank aim to bring back and maintain the annual inflation rate in line with the 2.5% +/- 1 percentage point flat inflation target, via the anchoring of inflation expectations over the longer time horizon, it said in a statement.

Romania's inflation rate jumped to a higher-than-forecast 6.29% in September from 5.25% in August, pushed up by higher prices for natural gas and electricity along with further increases in fuel and vegetable prices.

 

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