Romania's Ctrl Bk Cuts Key Rate By 50 Bps, To 8.5%

The Board of Romania’s central bank decided Tuesday to cut the key monetary policy rate by 50 basis points to 8.5% on the year and to lower the minimum reserve requirements ratio on foreign currency-denominated liabilities to 30%, from 35%.

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The lower reserve ratio will be applied to foreign currency-denominated liabilities with residual maturities of up to two years starting with the August 24-September 23, 2009 maintenance period, the central bank said in a statement.

The ratio for foreign currency liabilities with residual maturities of over two years was cut to zero back in March.

Analysts expected a 50 basis points rate cut, but estimated the central bank would leave the requirement ratios unchanged.

The central bank's Board also decided to actively use open-market operations in order to ensure an adequate management of liquidity in the banking system.

Since the beginning of 2009, the central bank has cut the key rate in four steps, from 10.25% to 8.5%.

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