The National Bank of Romania (NBR) is discussing today, in its third monetary policy meeting this year, whether it pursues a relaxation trend, by cutting the monetary policy interest rate to a record low or not.
After the central bank proved insensitive to the economy plunging into recession and put off a relaxation of the monetary policy at the end of last year, fearing inflation, in 2010 it signalled that it “wanted” a relaxation of lending and of the economy.
In the first two months of 2010, the NBR decided to cut the interest rate by 0.5% each, and in February returned to 7%, the all-time low recorded in the summer of 2007.
The RON’s appreciation trend against the euro and the decline in non-government lending could determine the NBR (National Bank of Romania) to pursue the trend of cutting the key interest rate, most likely by another 0.5%, according to analysts’ expectations.
The RON has managed to achieve a surprising appreciation against the euro, almost 4% since the beginning of the year, contradicting analysts’ expectations.
On the other hand, non-government lending saw a fourth consecutive decline compared with the previous month, a trend that started in November 2009. Non-governmental loans fell by 7.9% in February of 2010 against February 2009.