Romanian FinMin: more interest rate and liquidity stimuli still possible

Romania still has resources to use interest rate cuts and liquidity injections to stimulate the real economy sector, finance minister Florin Citu said in an interview for Radio Guerrilla on October 28, Agerpres reported.

The interest rate, in particular, is one of the instruments Romania [as a non-member of the euro area] could use to mitigate the effects of the crisis, Citu stressed.

Romania's National Bank (BNR), in its August 5 monetary policy meeting, cut its monetary policy rate by 25bp from 1.75% to 1.50%. This was the second rate cut since the coronavirus outbreak, the previous one (25bp as well) being made at the end of May.

"Inflation will not rise, and the interest rates will continue to fall. Interest rates have fallen every month this year and will continue to fall. Romania still has room to push the economy through interest rates. Minimum required reserves can also [be slashed] so we can inject more liquidity into the economy, and push the economy," Citu told Radio Guerrilla.

(Photo source: Gov.ro)