Romania Central Bank Leaves Rates Unchanged For Tenth Session

(RTTNews) - Romania's central bank left its key interest rate unchanged for a tenth straight session on Thursday.

The Board of the National Bank of Romania kept the monetary policy rate at 1.75 percent, the bank said in a statement.

The minimum reserve requirement ratio on foreign currency-denominated liabilities of credit institutions and the ratio on the leu-denominated liabilities were kept unchanged at 12 percent and 8 percent, respectively.

Citing its August Inflation report, approved on Thursday, the bank said the projected path of the annual inflation rate is significantly lower than that previously envisaged, amid the persistence of low inflation at global and regional levels. This is also likely to affect the developments in core inflation and volatile and administered price dynamics, the bank added.

The new forecast retains its upward profile, amid inflationary pressures from excess aggregate demand and unit labor costs.

Thus, the projected path of the annual inflation rate will remain in negative territory until the end of 2016, before returning within the target band in the course of 2017 and standing below the mid-point of the target at year-end, the bank said.

At the projection horizon, the annual inflation rate is forecasted to be in the upper half of the variation band of the flat target, the NBR added.

"The external environment is marked by heightened uncertainty surrounding global economic growth and euro area economic recovery, amplified by the outcome of the UK referendum, geopolitical tensions and difficulties facing European banks," the bank said.