The National Bank yesterday left unchanged the key interest rate on RON-denominated loans at 6.25% per annum, as well as banks’ minimum reserve requirements, as analysts had unanimously anticipated, announcing it is focusing exclusively on countering inflationary pressures and leaving it solely in the hands of the Government to stimulate the economy.
“The NBR’s Board of Directors reiterates that inflation resuming
a downward trend and a return to sustainable economic growth depend
decisively on the firm and consistent implementation of fiscal
consolidation measures, structural reforms and on increasing the
rate of absorption of EU funds,” says the NBR management.
The decision failed to have an impact on interest rates or on
quotes on the interbank forex market, with the euro climbing
slightly, towards 4.29 RON yesterday.
“The bleak prospects for recovery and the one-off nature of the
rise in inflation associated with the VAT hike lead us to believe
that the NBR is likely to initiate an easing cycle in the second
quarter of 2011 or even earlier,” comments Ilker Domac, analyst
with Citibank Turkey.
The NBR also announced yesterday it had set the inflation target at
3% for 2012, plus/minus one percent. As of 2013, the central bank
talks about a “stationary inflation target”, i.e. that it should
remain stable over the next few years, at 2.5%, with the same
variation range.