ING Bank Romania: Romanian Central Bank responded late to the crisis. The exchange rate stability will not last

Romanian Central Bank (BNR) responded late to the crisis and the recent monetary policy measures will not result in interest cuts on the market, since the stability of the exchange rate will not last long, according to ING Bank Romania general manager Misu Negritoiu, cited by Romanian press agency Mediafax.

Present at a Social-Democratic Party Union meeting, Negritoiu said that he did not believe „that the monetary policy is solely BNR’s attribute and I don’t believe the Central Bank is fighting the crisis, but adopts measures for ordinary situations. BNR reacted late and I don’t believe that what it’s recently done will result in interest cuts on the market”.

He believes hat the monetary policy pursuit is to keep the inflation under control, though this is not the main focus in a crisis. But a reduction, or even cancellation, of the minimum binding deposits (RMO) would bring much more money on the market, Misu Negritoiu opinionated. „I don’t believe we will see an interest increase or that the exchange rate stability will last much longer”, he added.

BNR Administrative council decided, at end of June, to cut 0.5% of the interest rate for fiscal policy, from 9.5% to 9%, starting July 1. It also agreed to reduce the RMO to 35% for the banks’ passives, with 5 points for foreign currency and with 3 points for lei, reaching 15%.

ING Bank Romania head recommended the support investment and the increase of jobs, a substantial cut in administrative spending and sale and consumption stimulation as anti-crisis measures. He said that the state budget lacked the money because the money „was spent before the crisis”. He also said he did not believe there was much chance for the reduction of taxes in Romania.