The bank kept the minimum reserve requirements unchanged at 15% for Romanian-leu denominated liabilities and at 20% for foreign currency liabilities.
The bank’s lower interest rate decision came after consumer prices fell for a fourth month in September, while the annual inflation eased to 3.45%, the lowest rate since the communist regime ended in 1989.
“Disinflation will likely strengthen in the coming months, while inflationary expectations will decrease, on the backdrop of a continued prudent monetary policy stance,” the central bank said in a statement.
It said the updated macroeconomic projections indicate the annual inflation should remain inside the 2%-4% target both in 2011 and 2012.
However, downside risks remain, particularly related to the evolution in international markets, the higher aversion to risk among invetors and the volatility of capital flows, the central bank said.
The bank reiterated its recommendation for improved savings on the local market, including via “an appropriate remuneration of bank deposits to ensure a sustainable external deficit and a gradual reduction of Romania’s dependency on external financing.”
Also, the lower key rate is expected to translate into appropriate bank lending rates, the central bank said.