NBR to keep interest rate at 6.5%, the highest in the region

The NBR (National Bank of Romania) today will leave the RON interest rate unchanged, at 6.25% a year, and will not change the minimum reserve requirements, either, anticipate unanimously the members of the Association of Financial-Banking Analysts in Romania. Foreign analysts expect a similar decision.
“Although economic activity remains very weak – with a Gross Domestic Product contraction of 2% this year – the central bank has no room to manoeuvre for the time being. Conditions on the financial markets can change fast, and become unfavourable for the RON and for Romanian T-bills. The political situation remains unstable, with things to potentially become even more troubled when talks start on the 2011 budget,” says Gaelle Blanchard, analyst with French group Société Générale, BRD’s majority shareholder.
This means the NBR will continue to have the highest key interest rate among countries in the region. In the Czech Republic, the central bank has held the key interest rate at 0.75% a year, while in Hungary the monetary authority decided on Monday to hold the forint interest rate at 5.25% a year. The decision of the National Bank of Poland is also expected today, with analysts anticipating it will remain at 3.5% a year.