Analysts: BNR To Leave Key Rate Unchanged At 6.25% Tuesday

05.02.2011 ZF English

Romania's central bank is likely to leave its key rate unchanged for the eighth straight time at 6.25% a year during its next monetary policy meeting May 3, as it continues to battle high inflation, the association of financial and banking analysts AAFBR said Monday.

AAFBR said all of the polled analysts expect the key monetary policy rate to remain at the record low of 6.25% at Tuesday's meeting, while the minimum reserve requirements will also be kept unchanged at 15% for Romanian lei and at 20% for hard currency.

Most of the analysts estimate the key rate will stay unchanged until the end of 2011, but there are some opinions that the central bank is likely to modify the rate, with forecasts varying between 5.5% and 6.75%.

Analysts expect a monetary policy ease in 2012, with the key rate seen down to 6% at the end of next year, with estimations varying between 4.5% and 7%.

The central bank cut its key rate in four steps last year, from 8% at the end of 2009, while keeping the minimum reserve requirements unchanged for both local and foreign currency liabilities.

In its latest monetary policy meeting on March 31, the central bank susprised the markets with a cut of the minimum requirements for foreign currency liabilities to 20%, from 25%, while keeping the key rate unchanged for the seventh straight time.

In March, Romania's annual inflation rose from 7.6% in the previous month to 8%, the highest rate singe August 2008.