February 14 (SeeNews) - Romania’s central bank said it decided to keep its monetary policy rate unchanged at 7%.
The central bank, BNR, also left unchanged the lending facility and deposit facility rates at 8.00% and 6.00% per annum, respectively, it said in a statement following a board meeting on monetary policy on Tuesday.
The existing ratios of minimum reserve requirements for both Romanian leu- and foreign currency-denominated liabilities of banks will also remain unchanged.
The decisions aim to bring the annual inflation rate back in line with the 2.5% ±1 percentage point flat target on a lasting basis by anchoring inflation expectations over the medium term in a manner conducive to achieving sustainable economic growth, BNR said.
Romania's annual inflation rate fell at a lower-than-expected pace to 6.61% in December 2023, from 6.72% in November and 8.1% in October, driven by the continued slowdown in the rise in the prices of processed food and energy, which offset, in terms of impact, the rebound in the annual dynamics of fuel prices, the central bank explained.
Based on its current assessment, the BNR expects inflation to pick up at the beginning of 2024 due to the increase in and introduction of some indirect taxes and charges. However, it is projected to decrease thereafter, though at a slower pace compared to previous periods. The annual inflation rate is anticipated to climb in January but then decrease towards the end of the year, approaching the upper bound of the variation band of the target by December 2024.
The unadjusted annual growth rate of Romania's gross domestic product (GDP) accelerated to 2.9% in the fourth quarter of 2023, from 1.1% in the previous quarter, according to flash data from the country's statistics board, INS.
The BNR last changed its policy rate on January 11, 2023, increasing it from 6.75% to 7%. The central bank will hold its next monetary policy meeting on April 4.