June 30 (SeeNews) - Romania's central bank, BNR, maintained on Thursday its monetary policy rate at a record low of 1.75%, in line with analysts' expectations.
BNR's board also decided to retain the minimum reserve requirement ratios on both leu- and foreign currency-denominated deposits at 8% and 12% respectively, it said in a statement.
BNR also noted it will pursue an adequate liquidity management in the banking system.
"The NBR is closely monitoring external and domestic developments and stands ready to use all its available tools during this period of heightened uncertainty in a bid to fulfil the overriding objective regarding medium-term price stability and to preserve financial stability," the short statement reads.
BNR last changed its monetary policy rate in May 2015, when it cut it by 25 basis points to 1.75%.
Romania's annual consumer price deflation deepened to a one-year high of 3.5% in May from 3.3% in April.
In a more detailed statement released later on Thursday, BNR said that it decided not to hike the key rate based on currently available data and in the context of heightened uncertainty.
"Short-term forecasts point to the annual inflation rate staying in negative territory, albeit at considerably less negative readings due to the fading out of the direct impact of broadening, in June 2015, the scope of the reduced VAT rate to all food items," the central bank commented. "The prospects for the inflation rate to gradually return into positive territory are surrounded by both domestic and external risks, amid heightened uncertainty."
Romania faces both external and internal risk and uncertainties, BNR noted.
The external environment is marked by persistently low inflation, as well as by the escalating uncertainty about global economic growth, the UK’s status in relation to the EU, and about the monetary policy stances of the world’s major central banks, given the higher volatility on international financial markets, BNR added.
On the domestic front, risks stem from the fiscal and income policy stance, as well as from the adverse effects generated by legislative changes in the financial and banking areas, the bank concluded,
(1 euro = 4.5210 Romanian lei)