Romania’s National Bank (BNR) made its first major monetary policy decision in 2017, on Friday.

BNR reduced the minimum reserve requirement ratio for foreign currency liabilities from 10% to 8%. This means that local commercial banks can withdraw several hundred million euro from the reserves held at the central bank, money they can use for lending or paying back external financing lines.

However, the central bank decided to keep the minimum reserve requirement ratio for liabilities in local currency lei at the level of 8%. The minimum reserve requirement ratios represent the amounts the banks are obliged to submit at BNR every month as a percentage of the attracted resources.

On Friday the central also decided to maintain the monetary policy interest rate at 1.75% per year.

The National Bank last operated a cut at the end of September 2016, when it reduced the minimum reserve requirement ratio for foreign currency liabilities from 12% to 10%.

editor@romania-insider.com