BUCHAREST, Aug 4 (AFP): Romania's central bank cut its main interest rate by 0.25 points to a record low of 3.25 per cent on Monday against a backdrop of slowing inflation.
The BNR said it had reviewed its annual inflation forecast to 2.2 per cent at the end of2014, down from 3.1 per cent previously.
"The analysis of the latest macroeconomic data shows the annual inflation rate remaining on a downward path and temporarily running below the lower bound of the variation band of the flat target," the central bank (BNR) said.
Consumer prices in June fell by 0.27 per cent from the level in May, as deflation hit Romania for the first time in two years.
The annual inflation rate fell to a historic low of 0.66 per cent in June, down from 0.94 percent in May.
"We suspect the move was intended as a signal that policymakers are alive to the threat of deflation," William Jackson of Capital Economics commented.
"But with inflation likely to rise over the coming months, we think today's move was probably a one-off rather than the start of a fresh easing cycle." The central bank had repeatedly cut its interest rate since July 2013 when the base rate stood at 5.25 per cent, in a bid to boost internal demand amid a soft recovery in the neighbouring eurozone and low inflation.
Romania cuts key rate as inflation slows down
FE Team | Published: August 05, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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