1 Iulie 2009
NBR cuts benchmark lending rate and required reserve ratio
It’s official: NBR drops the first signal of an easing the monetary policy in today’s rate-setting session.
NBR chopped the benchmark lending rate by 0.5% to 9%, as a response to a higher-than-expected deterioration of the economic environment in the first quarter and cut the required reserve ratio for leu-currency liabilities from 18% to 15%, in a bid to secure a permanent cash flow in the market. The bank reduced the reserve requirement for FX liabilities from 40% to 35% accordingly.
Therefore, the statutory required reserve ratio that banks must hold at the central bank drops as of RRR-setting period July 23 – August 23, from 15% to 15% for leu currency liabilities and from 40% to 35% in case of foreign currencies.
Analysts said the economic environment has deteriorated above expectations in first quarter, and under these circumstances the 10% benchmark lending rate was too high.
Romania’s gross domestic product dropped 6.4% in first quarter year-on-year, according to National Institute of Statistics.
The majority of members of Association of Financial-Banking Analysts were expecting the central bank to cut the benchmark rate by 0.05% to 9% and to leave the required reserve ratio unchanged.
Therefore, the statutory required reserve ratio that banks must hold at the central bank drops as of RRR-setting period July 23 – August 23, from 15% to 15% for leu currency liabilities and from 40% to 35% in case of foreign currencies.
Analysts said the economic environment has deteriorated above expectations in first quarter, and under these circumstances the 10% benchmark lending rate was too high.
Romania’s gross domestic product dropped 6.4% in first quarter year-on-year, according to National Institute of Statistics.
The majority of members of Association of Financial-Banking Analysts were expecting the central bank to cut the benchmark rate by 0.05% to 9% and to leave the required reserve ratio unchanged.