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Romania’s central bank keeps benchmark rate on hold

MNB

Photo by kyrien / Shuttestock.com

The National Bank of Romania (BNR) kept its benchmark interest rate unchanged again at 2.5% on Thursday, October 3, aiming to balance above-target inflation with the risk of exacerbating the country’s current account deficit, international news wire Reuters reported. 

Photo by kyrien/Shuttestock.com

The central bank has now held the benchmark interest rate at 2.5% since May 2018, when it was raised by 50 basis points to combat a surge in inflation.

BNR Governor Mugur Isărescu said the decision to keep rates unchanged after the world’s largest central banks have cut theirs amounted indirectly to policy tightening.

Isărescu also said inflation is expected to remain above the bank’s 1.5-3.5% target band this year, although at a lower level than previously forecast. Romania’s inflation rate slowed to 3.9% in August. The BNR’s current inflation forecast stands at 4.2% at yearʼs end, Reuters notes.

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