Romania C. Bank Hikes Key Rate to 6.75%

World

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The National Bank of Romania raised its key monetary policy rate by 50 basis points to 6.75% on its meeting on Tuesday.

The decision aims to anchor inflation expectations over the medium term, as well as to foster saving through higher bank rates, so as to bring back the annual inflation rate in line with the 2.5% plus/minus 1 percentage point flat target on a lasting basis, in a manner conducive to achieving sustainable economic growth, the bank said.

Inflation in Romania rose to a 19-year high of 15.9% in September.

The bank's Board expects inflation to continue rising mildly through the fourth quarter of 2022 and slow in 2023, before easing back to single-digit figures in the first half of 2024 should no further commodity supply shocks occur.

The central bank also decided to increase the deposit facility rate to 5.75% from 5.25%, as well as the lending facility rate to 7.75% from 7.25%.

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