The bank kept its minimum requirement ratios at 14% for hard currency deposits and 10% for leu deposits.
The central bank’s board also decided to narrow the symmetrical corridor of interest rates on the standing facilities around the policy rate to plus/minus 2.25 percentage points from plus/minus 2.5 percentage points.
“Thus, starting 8 January 2015, the interest rate on (the central bank’s) lending facility (Lombard) will be lowered to an annual 4.75% from 5.25%, while its deposit facility rate will remain at 0.25% per annum,” the bank said in a statement.
These decisions are meant to ensure price stability over the medium term, along with the sustainable recovery of lending, which is likely to help achieve balanced and lasting economic growth, the bank said in a detailed statement.
“Looking at the real economy, the latest statistical data point to a step-up in the annual dynamics of gross domestic product amid the recovery of domestic demand, fostered by both its major components, i.e. consumption and investment.”
Analysts largely expected a rate cut at today’s board meeting, the fourth reduction since August, due to the subdued inflation outlook. The annual inflation fell to 1.26% in November, from 1.44% a month before, outside the central bank’s target interval of 1.5%-3.5%.
The bank said the annual inflation rate is expected to remain below the lower bound of the variation band , as a result of the influence exerted by developments in the global oil price and the persistence of the negative output gap. “At the same time, there is heightened uncertainty surrounding external developments owing to resurgent geopolitical tensions in the region and to monetary policy stance adjustments by major central banks worldwide.”
The central bank also noted that the real growth rate of leu loans picked up, mainly due to lower rates, but the real annual dynamics of credit to the private sector remained in negative territory, as the stock of foreign currency credit is falling while banks are removing non-performing loans from their balance sheets.