Baluarte
05-02-2013, 11:21 AM
Romania’s central bank kept its main interest rate unchanged for a ninth meeting, holding back from making a reduction as it waits for the European Union’s highest inflation rate to fall closer to its target.
The Banca Nationala a Romaniei left the benchmark rate unchanged today at 5.25 percent, the EU’s highest, according to an e-mailed statement. The decision matched all of the estimates by 19 economists surveyed by Bloomberg. It left its minimum reserve requirements on foreign-exchange deposits at 20 percent and the ratio for leu deposits at 15 percent. It cut the overnight Lombard rate to 8.25 percent from 9.25 percent and raised its deposit facility rate to 2.25 percent from 1.25 percent. Governor Mugur Isarescu will hold a briefing to explain the decision later today.
Romania halted a rate-cutting cycle a year ago as poor agricultural output boosted food prices and a pledge to the International Monetary Fund and the EU to free energy tariffs increased utility bills. Other countries are dropping rates to spur growth as the euro area struggles with the debt crisis.
“Romania is increasingly the laggard” in lowering rates in central and eastern Europe “with its policy rate still unchanged at 5.25 percent, but we also see an increasing chance of a rate cut there by July,” said Gillian Edgeworth, the chief economist for emerging Europe, the Middle East and Africa at UniCredit SpA (UCG) in London, before the rate announcement.
Romania’s inflation slowed more than estimated in March to 5.25 percent from 5.65 percent in February. Price growth will return to the central bank’s target range of 1.5 percent to 3.5 percent by year-end, policy makers predict.
Hungarians, Czechs
The leu, the best-performing currency against the euro this year among eastern European peers, traded at 4.3256 per euro in Bucharest today, down 0.2 percent from yesterday’s close.
Neighboring Hungary cut its main rate to a record-low 4.75 percent on April 23 to help its economy emerge from a recession as the inflation rate stood at 2.2 percent in March, the lowest in almost 39 years. Poland’s central bank also reduced its benchmark seven-day reference rate to 3.25 percent on March 6. The Czech Republic has kept the rate at 0.05 percent since last November and is expected to remain on hold at today’s meeting, according to a Bloomberg survey of 18 economists.
Romania avoided a recession last quarter as gross domestic product rose a seasonally adjusted 0.4 percent from the previous three months, more than a previous estimate of 0.1 percent. The economy is set to grow 1.6 percent this year, according to the European Commission.
To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; Irina Savu in Bucharest at isavu@bloomberg.net.
To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; James M. Gomez at jagomez@bloomberg.net
The Banca Nationala a Romaniei left the benchmark rate unchanged today at 5.25 percent, the EU’s highest, according to an e-mailed statement. The decision matched all of the estimates by 19 economists surveyed by Bloomberg. It left its minimum reserve requirements on foreign-exchange deposits at 20 percent and the ratio for leu deposits at 15 percent. It cut the overnight Lombard rate to 8.25 percent from 9.25 percent and raised its deposit facility rate to 2.25 percent from 1.25 percent. Governor Mugur Isarescu will hold a briefing to explain the decision later today.
Romania halted a rate-cutting cycle a year ago as poor agricultural output boosted food prices and a pledge to the International Monetary Fund and the EU to free energy tariffs increased utility bills. Other countries are dropping rates to spur growth as the euro area struggles with the debt crisis.
“Romania is increasingly the laggard” in lowering rates in central and eastern Europe “with its policy rate still unchanged at 5.25 percent, but we also see an increasing chance of a rate cut there by July,” said Gillian Edgeworth, the chief economist for emerging Europe, the Middle East and Africa at UniCredit SpA (UCG) in London, before the rate announcement.
Romania’s inflation slowed more than estimated in March to 5.25 percent from 5.65 percent in February. Price growth will return to the central bank’s target range of 1.5 percent to 3.5 percent by year-end, policy makers predict.
Hungarians, Czechs
The leu, the best-performing currency against the euro this year among eastern European peers, traded at 4.3256 per euro in Bucharest today, down 0.2 percent from yesterday’s close.
Neighboring Hungary cut its main rate to a record-low 4.75 percent on April 23 to help its economy emerge from a recession as the inflation rate stood at 2.2 percent in March, the lowest in almost 39 years. Poland’s central bank also reduced its benchmark seven-day reference rate to 3.25 percent on March 6. The Czech Republic has kept the rate at 0.05 percent since last November and is expected to remain on hold at today’s meeting, according to a Bloomberg survey of 18 economists.
Romania avoided a recession last quarter as gross domestic product rose a seasonally adjusted 0.4 percent from the previous three months, more than a previous estimate of 0.1 percent. The economy is set to grow 1.6 percent this year, according to the European Commission.
To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; Irina Savu in Bucharest at isavu@bloomberg.net.
To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; James M. Gomez at jagomez@bloomberg.net