April 4 (SeeNews) - Romania's central bank said on Wednesday it has maintained its monetary policy rate at 2.25% - contrary to most analysts' expectations.
"The central bank decided to leave unchanged the deposit facility rate at 1.25% per annum and the lending facility rate at 3.25% per annum," the central bank, BNR, said in a statement.
BNR also decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of banks.
BNR last changed its monetary policy rate in February, when it raised it by 25 basis points to 2.25%, the second rate hike this year.
Romania's annual consumer price inflation quickened to 4.7% in February from 4.3% in January. In February, BNR increased its 2018 inflation forecast to 3.5% from 3.2%.
BNR's move is contrary to analysts' expectations, who predicted that the bank would increase its key rate by 0.25% on Wednesday for a third time this year, to 2.50%, as inflation is expected to pick up.
"We expect the BNR to deliver a third 0.25pp key rate hike to 2.50%, as inflation continues to rise quickly and was probably close to 5% in March, up from 4.7% in February," UniCredit Bank analysts said on Monday in a weekly analysis. The analysts also said they expect BNR to hike the key rate at its monetary policy meetings scheduled for May 7 and July 4.
UniCredit analysts estimated that annual inflation would peak slightly above 5% in the second quarter and hover close to 5% for most of the third quarter before falling towards the 3.5% upper range of the targeted interval due to base effects.
For their part, ING Bank analysts said on Monday that with the high February inflation, there are few arguments for the BNR to take a pause in the hiking cycle.
"We expect the NBR to raise the key rate by 25bp, and continue to balance higher key rates to contain inflation expectations and limited transmission of the hikes into the cost of credit by leaving liquidity unsterilized," ING analysts said in a global market research report.
ING analysts see CPI reaching a peak of 4.8% in the second quarter and only start to print levels below 4% in the last quarter of the year, with a stabilization over the medium term close to the upper bound of the BNR’s target interval.
(1 euro=4.6598 lei)