It was the fourth consecutive cut this year. The central bank has resumed its monetary easing cycle in July, on the back of lower inflationary pressures.
The bank left its minimum reserve requirements unchanged at 15% for Romanian-leu denominated liabilities and at 20% for foreign currency liabilities at the Tuesday meeting.
Romania’s inflation decelerated to 1.8% in September from 3.67% in August as food prices continued a four-month decline.
“The latest macroeconomic data point to faster disinflation attributed to a significant decline in food prices as a result of bumper crops, a lower sales tax for bread and other bakery products, as well as to the elimination of a negative base effect recorded in 2012,” the central bank said in a detailed statement.
A continued weak domestic demand and the negative output gap also contributed to the lower inflation rate.
“The improved inflation outlook has enabled the central bank to gradually adjust its monetary policy stance over the past few months,” the statement noted.
The central bank targets an annual inflation of 2.5% at the end of 2013, plus/minus one percentage point around the band.
The bank expects the inflation rate will decelerate to historical lows in the first part of 2014, on the back of a positive effect of this year’s crops and the lower value added tax rates for bread and bakery items.