Romania Central Bank Raises Rates Further


By Jyotsna V   ✉   | Published:

Romania’s central bank hiked the key policy rate for the ninth session in a row, in a bid to rein in inflation and to support the economy.

The NBR Board decided to increase the monetary policy rate to 6.25 percent from 5.50 percent, the National Bank of Romania said in a statement on Wednesday. Economists had expected an raise to 6.00 percent.

The central bank also lifted the the lending facility rate to 7.25 percent from 6.50 percent and the deposit facility rate to 5.25 percent from 4.50 percent.

Policymakers also reaffirmed their decision to maintain firm control over money market liquidity.

The minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions were retained at their current levels.

The bank has been raising interest rates since October 2021, when it hiked the key policy rate by a quarter point to 1.50 percent. That was the first increase since May 2018.

“The NBR Board decisions aim 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 percent ±1 percentage point flat target on a lasting basis, in a manner conducive to achieving sustainable economic growth,” the central bank said.

“The NBR closely monitors developments in the domestic and international environment and will continue to use the tools at its disposal to achieve the fundamental objective of price stability in the medium term,” the bank added.

Annual inflation resumed its acceleration in August, climbing to 15.32 percent, mainly driven by higher food prices.

Inflation is expected to stick to an upward path towards year-end, under the impact of supply-side shocks, yet at a visibly slower pace, the bank said.

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