The Romanian Central Bank (BNR) reduced the key interest rate from 6 percent to 5.75 percent per year in its latest monetary policy meeting today (January 5), as expected by the analysts. The measure will be enforced starting January 6, 2012.

BNR also maintained the existing levels of minimum reserve requirement ratios on both RON-denominated and foreign currency-denominated loans.

Analysts expect BNR to continue to reduce the key interest rate to 5.5 percent until end-2012.

BNR reduced the key interest rate from 6.25 percent to 6 percent in November 2011. Romania was the first of the EU emerging countries to cut the key interest rate in May 2010, from 6.5 percent to 6.25 percent, in order to foster the economic recovery. In December 2009, the key policy rate was of 8 percent and gradually decreased throughout 2010.

Irina Popescu, irina.popescu@romania-insider.com

(photo source: Romania-Insider.com/Corina Saceanu)