Central Bank increases key interest rate 7th time in a row

The board of the Romanian Central Bank (BNR) decided on Thursday to increase the key interest rate 0.25%, starting on August 1, from 10 to 10.25%, a BNR press release informs. This is the highest level since August 2007, when it reached 12.5%.

BNR is decided to continue to firmly manage the cash on the monetary market through market operations and to preserve the current level for minimum obligatory reserves for banks.

The Central bank increased the key interest rate for the seventh time in a row, in every board session that took place after October 2007, when the rate was 7%. The last increase took place in June 2008.

The decision comes against all expectation expressed by financial analysts, who believed that the Central Bank will stop at the 10% level established in June, since the inflation was expected to peak in July and then enter a descending trend.