The central bank also maintained the minimum reserve requirements unchanged at 15% for Romanian leu-denominated liabilities and at 20% for foreign currency liabilities.
At the previous monetary policy meeting in June, the bank’s chief Mugur Isarescu said the leu requirements could be gradually lowered later this year to counter a liquidity shortage in the interbank market.
The central bank has cut its main rate by 75 basis points to a record low of 5.25% in several steps this year, but a government collapse late April halted the monetary easing cycle. The decision was also influenced by a worsening external environment as the eurozone plunged deeper into the sovereign debt crisis.
Moreover, Romania’s annual inflation rate accelerated to 2.04% in June from an all-time low of 1.79% in May, ending a seven-month slowdown.
“The macroeconomic indicators have heightened asymmetric risks to the inflation outlook amid an adverse external environment and domestic political tensions,” the central bank said in a detailed statement later Thursday.
It said the external environment was affected by worsening economic prospects against the background of increased investor risk aversion and of the uncertainties surrounding a sustainable resolution of the euro area sovereign debt crisis.
“These developments, combined with persistent domestic political tensions, generated net capital outflows with an unfavorable impact on the leu exchange rate. The slowdown in foreign currency credit growth also triggered a moderation of the expansion in lending to the private sector,” the bank said.
Romania’s leu fell to record lows against the euro in July as a political battle between the governing coalition and the president jittered investment sentiment.
“Possibly persistent domestic political tensions together with the above-mentioned [macroeconomic] developments, call for a further prudent monetary policy stance,” the statement noted.
The central bank also approved its quarterly inflation report at the Thursday’s meeting, which will be released August 6.
The bank targets an annual inflation of 3% at the end of 2012, plus/minus one percentage point around the band. The bank estimates the annual rate will peak to 3.8% in September before stabilizing at around 3% in the fourth quarter.