BNR decided to leave reserve requirements unchanged, both for leu and forex-denominated liabilities.

The 50 economists with the Association of Financial-Banking Analysts in Romania had expected the central bank to slash the benchmark lending rate to by 50 basis points to 7%.

Around 17% of the analysts polled by AAFBR had predicted a half-percentage point cut in required reserve ratio for forex-denominated liabilities from 25% to 20%. As for leu liabilities, analysts hadn’t forecasted any change in reserve requirements.

In the latest rate-setting session in early January, the board of NBR reduced the key rate by 50 basis points to 7.5%.

The last cut in reserve requirements was made in the “surprise” session in November 2009, when the central bank reduced RRR for forex-denominated liabilities from 30% to 25%.

ING’s bet


ING analysts had expected the National Bank of Romania to cut benchmark interest rate by three quarters of a percentage point to 6.75%, given IMF’s decision to free up the funds under the rescue package, and the visible improvement of the country’s economy.

ING stressed said that 0.75 percentage point cut would be grasped by investors as a signal that the Romanian economy was on the right track and at the same time it would provide the necessary incentives to strengthen the country’s economy.

“In light of the high market interests, a 0.75% rate cut would be necessary to lower them. A mere 50bp cut would only keep interests unchanged or even lift them”, the bank said in a report.