BUCHAREST, July 8 (Xinhua) -- Romania's central bank, the National Bank of Romania (BNR), decided Tuesday to keep its key monetary policy rate unchanged at 6.5 percent per annum, amid rising inflationary pressures and a stagnating economy.
The central bank also maintained the Lombard lending facility rate at 7.5 percent and the deposit facility rate at 5.5 percent, along with minimum reserve requirements on both leu- and foreign currency-denominated liabilities of credit institutions.
This decision follows two rate cuts earlier in 2024, one in July from 7 percent to 6.75 percent, and another in August to 6.5 percent.
Inflation accelerated in May to 5.45 percent, up from 4.85 percent in April, driven primarily by rising food and energy prices.
Meanwhile, Romania's economic growth has slowed sharply, with gross domestic product (GDP) increasing by just 0.3 percent year-on-year in the first quarter (Q1) of 2025, compared to 0.5 percent in the fourth quarter (Q4) of 2024. While gross fixed capital formation rebounded, weaker household consumption and deteriorating net exports weighed heavily on overall growth. Both the trade and current account deficits continued to widen rapidly.
According to ING Bank NV economist Stefan Posea, BNR's decision reflects a cautious approach in the face of persistent inflationary pressures and lackluster economic momentum. ■
