The NBR (National Bank of Romania ) decided yesterday in itsfirst monetary policy meeting to leave unchanged both the keyinterest rate, which has remained set at 6.25% since May 2010, andthe minimum reserve requirements, preferring not to send outsignals for a lending revival and for a reboot of therecession-mired economy.
The economy has been unable to get back on its feet in the last29 months, with Romania being one of the few countries in Europenot to record economic growth. In two years the economy lost over30 billion euros of its GDP (Gross Domestic Product), with over20,000 companies whose businesses amount to over 11 billion eurosbecoming insolvent.
NBR officials justified their reluctance to cut the key interestrate citing the risk of encouraging exchange rate speculationsagainst the RON, and saying the measure would not have any majoreffects on loan interests.
The exchange rate has been stable for several months,fluctuating between 4.2 and 4.3 RON/euro, with interests onRON-denominated deposits ranging between 6 and 8.5% a year, whileloan interest rates range from 11 to 18%.
Analysts anticipated this NBR decision, with inflationary risksremaining in the following period, especially as far as food andfuel prices are concerned.
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