Romania Central Bank Holds Interest Rate at 6.25%

The Banca Nationala a Romaniei maintained its policy rate unchanged at 6.25%.  The Bank also "decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions".  The Bank noted: "The inflation outlook continues to feature significant risks", pointing to commodity prices, administered price adjustments, global financial market reactions to the ongoing sovereign debt crisis in Europe, and possible second round effects from supply shocks.

Previously the Bank also held the interest rate unchanged at 6.25%, its last move was a 25 basis point cut in May 2010.  Romania reported annual consumer price inflation of 8.4% in May, up from 8.3% in April, and 7.6% in February 2011, and above the Bank's inflation target of 3% plus or minus 1%.  The Bank expects energy sector reforms and prices rises to keep inflation elevated this year. 

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