After a similar measure in February, the National Bank of Romania has reduced the monetary policy interest rate to 3.25% per year, starting on August the 5th. As a result, the central bank recommends that commercial banks should not reduce interest rates paid for deposits and should resume lending, but on solid bases. Here is the National Bank governor, Mugur Isarescu:<\/p>\n
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\u201cOur message is that banks should understand that they have been through a relatively painful process, with high dependence rates and foreign financing lines, including from their parent companies. What we would like banks to do now is prove they have some vision, get closer to their clients, improve their lending basis and work with their clients to find viable projects. The idea that there are no projects in Romania is rather an excuse. It is the duty of banks, too, to create businesses, by working with their clients.\u201d<\/p>\n
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The central bank has also decided to keep the reserve requirements for national and foreign currency liabilities at 12% and 16% respectively. On the other hand, the National Bank has reduced its inflation forecast to 2.2% for this year and 3% for end-2015. In this context, Mugur Isarescu said the key interest rate might be lowered even further, if the downward trend in inflation proved sustainable. He added that the bank would take into account the fact that in many countries real interests paid on deposits are negative, and that when the central bank lowers the key interest, local banks rush into reducing the interest rates paid for savings, rather than the interests charged for loans.<\/p>\n
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In his turn, Valentin Lazea, a National Bank senior economist, told Agerpres that for the first time Romania meets all the five criteria for adopting the single currency, and has a good performance in terms of the eurozone convergence criteria. He warns however that there are long-term risks that may affect this situation, such as the fact that all the factors contributing to the GDP, namely the capital, labour and productivity, are on a downward trend.<\/p>\n
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According to Lazea, an improvement of the EU fund spending and the encouragement of foreign direct investments are needed in order to help capital recover. The National Bank official also explained that the improvement of labour requires efficient pronatalist and immigration policies, while productivity cannot increase without a systematic reform of the education sector. <\/p>\n
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As of August the 5th, the National Bank of Romania has lowered the key interest rate from 3.50 to 3.25% per year. The inflation forecast for the year has also been improved, from 3.3 to 2.2%.<\/p>\n","protected":false},"author":2,"featured_media":66333,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37738],"tags":[],"coauthors":[],"class_list":["post-55891","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-today-in-the-news"],"acf":[],"yoast_head":"\n