The lower requirements will be applied starting with the July 24-August 23, 2014 period, the central bank said. The minimum reserve requirements for Romanian leu-denominated liabilities were left unchanged at 12%.
A detailed statement on the bank’s monetary policy decisions will be released later today.
Official sources last month told Mediafax that the central bank was likely to cut its reserve requirement ration on foreign currency-denominated liabilities at today’s meeting, following a series of recent monetary easing policies across Europe.
“The reserve ratio is becoming costly for the central bank,” the mentioned people told Mediafax.
The European Central Bank recently cut its main interest rate to a record low of 0.15% and imposed a negative rate of -0.1% on bank deposits, in a move aimed at boosting inflation and kick-start lending in the eurozone.
In a separate statement Tuesday, the Romanian central bank said the low annual inflation rate, alongside the latest developments in the local banking system, have allowed it to adjust its monetary policy stance under a program “aimed to gradually align the minimum reserve requirement ratios to European standards.”
“The annual inflation rate decelerated below the projected level, influenced by a series of transient factors, such as volatile food prices and the leu’s appreciation, as well as by a still weak domestic demand,” the central bank said.
Romania’s annual inflation eased to an all-time low of 0.94% in May, from 1.2% a month earlier.
Although the overall private lending remained in negative territory during the first months of 2014, the lending in local currency continued to grow, as interest rates declined, reflecting the successive cuts in the central bank’s main lending rate, the statement showed.
Moreover, the improved perception of investors and rating agencies on the Romanian economy has led to an increase in capital inflows, which has also reflected in the leu’s appreciation against the euro, the central bank said.
At the same time, the money market posted a net liquidity surplus and interbank rates fell below the monetary policy rate, it added.