Given the uncertainties regarding the economic and financial evolutions, the central bank has also decided to suspend the calendar of key rate review meetings previously announced and to further hold the monetary policy meetings whenever necessary.
Considering the current domestic and global context and based on the information and analyses regarding the constantly changing macroeconomic and financial evolutions, the central bank has decided as follows:
– to lower its benchmark interest rate by 0.50 percentage points to 2% from 2.5% starting March 23, 2020;
– to narrow the symmetrical corridor of interest rates on the standing facilities around the monetary policy rate to plus/minus 0.5 percentage points from plus/minus 1 percentage point.Starting March 23, 2020, the interest rate for the deposit facility is kept at 1.50%, and the rate for the lending facility (Lombard) will be cut to 2.50% from 3.50%;
– to supply liquidity to credit institutions via repo operations (reversible operations with government bonds) with a view to ensuring a fluent functioning of the monetary market and of other segments of the financial market;
– to purchase leu-denominated government bonds on the secondary market in a bid to consolidate the structural liquidity of the banking system, which is meant to contribute to financing the real economy and the public sector in good conditions.
Depending on further development, the central bank is ready to also lower the minimum reserve requirements on foreign and leu currency liabilities.
The central bank announced Thursday (March 19) that it would ensure uninterrupted cash flows for all operations and said it fully supported all steps taken by banks to assist individuals and companies affected by the coronavirus crisis with adequate ways to ease payment of instalments on ongoing loans and facilitation of access to new lines of credit.
It also said it has taken all the necessary steps to continue to ensure the smooth running of the payment and clearing systems in domestic currency so commercial and financial transactions could continue smoothly, regardless of how the situation caused by the coronavirus pandemic develops.