Romania has the highest reference interest rate in the region

Romania’s monetary policy interest rate, set at 6.25% back in May, continues to be the highest in the region despite the repeated cuts made by the National Bank of Romania.

Although the NBR has cut the interest rate to 4% in less than two years, it continues to be over six times higher than the one in the Czech Republic, and nearly double the Polish interest rate.

Romania’s Western neighbour Hungary also has a lower interest rate, 5.25%, although at the end of 2008, Hungary’s interest rate was close, at 10%, to Romania’s 10.25%.
Officials of central banks in the region resorted to cuts in order to revive lending, amid the current international economic crisis. Interest rates, at 0.7% in the Czech Republic, and at 3.5% in Poland, are expected to remain unchanged until the beginning of next year.
“In general, the interest rate cannot disregard the state of an economy. The interest rate level is influenced by a series of factors, among which economic development, the degree of savings, and inflation. A comparison between Romania and the Czech Republic reveals that the balance is tipped in the Czech Republic’s favour, where all economic indicators perform better, as does the loan/deposit ratio,” explains Lucian Anghel, BCR chief economist.