Romanian Central Bank Keeps Key Rate Unchanged at 2.5% a Year

Romania's central bank on Thursday kept its benchmark interest rate on hold at 2.5% at its first monetary policy meeting this year, the bank said in a statement.

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The central bank board also kept rates for its deposit and lending facilities unchanged at 1.5% and 3.5%, respectively.

It also left minimum reserve requirements on foreign currency liabilities and for leu deposits unchanged at 8%.

While the rate hold was largely expected, a tax on the financial assets of local banks introduced by the government via emergency decree in late December 2018 is seen as complicating monetary policy decisions. Under the decree, banks will pay a progressive tax of 0.1%-0.5% of assets if money market rates exceed 2%, a move the government said was aimed at lowering lending costs for households.

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