Romania's central lender board surprised the market by decreasing mandatory minimum reserves both in lei and foreign currency besides cutting the key interest rate, which leaves new liquidities at the reach of banks, while the access to external financing is being reduced.
The
key interest rate is now equal to that between February and March 2008,
when BNR was practicing a severe monetary policy. Since the beginning
of the year the rate was pushed down by 1.25 percentage points, from
10.25 percent to 9 percent.
The
lombard interest will also shrink from 13.5 percent to 13 percent and
the deposit facility rate will decrease from 5.5 percent to 5 percent.
Minimum mandatory reserves stand now at 15 percent for lei passives and at 35 percent for foreign currency passives.
While
analysts expected the minimum mandatory reserves to be kept at the old
level or to be modified partially, the changing of the key interest
rate was seen as necessary as the economic environment deteriorated
over expectations in the first quarter.
Napoleon
Pop, member of the BNR board, declared that for lei passives the sum
released into the market is of about 4 billion lei, while the total
amount is of 9 billion lei.
BNR
now pays banks for minimum reserves annual interests of 5.11 percent
for lei, 2.67 percent for euros and 1.07 percent for dollars.
The central bank also announced that it would keep using market operations to administer the liquidity in the banking system.
