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BNR could reduce the key interest rate at 2% on Tuesday at the same time with the maintenance of minimum reserves
The National Bank could reduce in the Tuesday meeting of the Board the key interest by 0.25%, at 2% this being possibly the last cut of this cycle, and the compulsory minimum reserves will be kept at 10% for lei and 14% for foreign currency, estimate the analysts.
‘This could be the last reduction of the key interest from the present cycle, most estimates for the December 2015 interval showing that the key interest should be 2%. In parallel, most of the participants estimate the reduction of the compulsory minimum reserves for liabilities in lei down to 8% in December 2015 as well as of those corresponding to liabilities in foreign currency at 12% in December 2015’ a survey made by the Association of Financial-Banking analysts of Romania (AAFBR) says.
The level of key interest could be kept to the end of next year, but the estimates of the analysts vary between 1.75% and maximum 2.75%, a number of participants at survey estimating a cycle of increasing the interest rate in 2016.
At the same time, the minimum reserves (RMO) could be reduced during next year, up to 6% in the case of lei and 8% in the case of foreign currency. The Board of BNR cut at the beginning of February the rate of monetary policy by 0.25% from 2.5% to 2.25% a new historic minimum, as well as the narrowing of the symmetric corridor from the interest rates of facilities at 2 percentage points.
This was the fifth cut after the resumption of the reduction cycle, in August of last year, when they applied a drop by 0.25 percentage points, from 3.5% to 3.25%. Starting with August 2014, there had been four reductions, out of which the last one this year at the beginning.
At the same time, BNR decided in February the keeping of the present levels of the rates of minimum reserves applicable to liabilities in lei and in foreign currency of the institutions of creditation, at 10% and 14% respectively.
The last intervention of the central bank as regards minimum reserves was in November, when they reduced the RMO rates for liabilities in foreign currency from 16% to 14% the ones in lei being kept at 10%. Mugur Isarescu, the BNR governor stated after the meeting that starting February the BNR has more space to cut the interest rate, taking into consideration the levels of inflation, as well as the prognosis for the end of the year, saying that the reduction could be resumed towards spring-summer.