Analysts expect the central bank to continue its monetary easing cycle in November, and cut its monetary policy rate by another 0.25 percentage points to 2.75%. At the same time, the minimum reserve requirements for Romanian-leu denominated liabilities are expected to be cut, while the minimum reserve requirements for foreign currency liabilities are seen unchanged.
Early August, the central bank lowered its main monetary policy rate by 25 basis points to an all-time low of 3.25% a year, but kept the minimum reserve requirements unchanged for both leu and foreign currency deposits, at 12% and 16%, respectively.
The central bank also revised sharply down its inflation forecast to 2.2% this year from 3.3% previously, saying the inflation rate is expected to decelerate at a faster pace than initially estimated. The forecast on the 2015 year-end inflation was also revised down to 3%, from 3.3% previously envisaged. The average annual inflation is seen at 1.4% this year and at 2.4% in 2015.
Central bank governor Mugur Isarescu said in August that the central bank still has room for further interest rate cuts as the inflation continues to decelerate, but a decision in that direction depends mostly on external evolutions, particularly on future capital inflows from neighboring markets.
Founded in 2008, AAFBR includes around 60 financial and banking analysts.