Romania's central bank held its interest rate steady for the third consecutive session on Wednesday. The National Bank of Romania's board opted to sustain the monetary policy rate at 6.50 percent, whilst keeping the lending facility rate at 7.50 percent and the deposit facility rate at 5.50 percent unchanged.
Moreover, it upheld the current levels of minimum reserve requirement ratios for credit institutions' obligations, whether in leu or foreign currency.
A fresh analysis reaffirmed the forecast for an inflation dip within the initial quarter of 2025. However, this decline is expected to take a steeper trajectory than previously anticipated, according to the bank's observations. Additionally, the bank identified significant uncertainties and risks associated with the forthcoming fiscal and income policy direction.
Liam Peach, an economist at Capital Economics, pointed out that a mix of inflation exceeding targets and a sluggish pace of fiscal consolidation suggests a need for a minimally aggressive easing cycle this year. Peach anticipates a reduction of 50 basis points in the rates during the latter half of the year, bringing it down to 6.00 percent.
