“The escalations in Ukraine and the higher inflation estimated for the second half of the year, as well as a possible weaker farm output, are the likely factors the central bank might consider at the meeting,” said Dorina Cobiscan, a member with the Association of Romanian Financial and Banking Analysts.
The Association expects the central bank will maintain its main lending rate unchanged until the end of 2014, and possibly even in 2015.
However, the bank will likely lower its minimum reserve requirements for leu-denominated liabilities to 10% this year, from 12% currently. The requirements on foreign currency liabilities could be cut from 18% to 16% by December and to 14% by the end of 2015, the Association said in a survey.
Romania’s central bank left its key rate unchanged at a record low of 3.5% in March, ending an eight-month long monetary easing cycle. The bank has lowered its main lending rate by a cumulative 200 basis points since July 2013.