The National Bank of Romania continued to push down interest rates today, and lowered its benchmark interest rate by 50 basis points to 6.5%, in an effort to loosen credit conditions and reignite lending.

NBR aims to consolidate favorable conditions for a sustainable revival of lending and the achievement of a solid economic recovery.

“A significant improvement of the liquidity in the banking sector is worth noting, while the average rates on banks' new deposits as well as lending rates on new loans, despite their downward adjustment, have remained relatively high in relation to the monetary policy rate,” the central bank said.

The National Bank of Romania had cut the key rate in January by 0.5% and by another half percentage point in February, this being the third in a series of rate cut that continued this year.

“The analysis of macroeconomic developments show the resumption of the disinflation process amid a drop in adjusted CORE 2 annual inflation rate and an appreciation of the leu, together with the existence of signs of recovery in some sectors, while for others uncertainties persist. The annual inflation rate fell to 4.49 percent in February after it surged to 5.2 percent in January under the temporary impact of the exogenous shock of the adjustment of excise duties on tobacco”, NBR said in a release.

Statistical data provided by the central bank reveal a slightly slower decline in final private consumption, an improved export performance while the current account deficit has remained at sustainable levels. Meanwhile, the annual dynamics of credit to the private sector, especially of leu-denominated loans, have remained in negative territory.