Cristian Popa, a board member of Romania's National Bank (BNR), says that the central bank "must evaluate carefully whether a further rate cut is appropriate."
He rhetorically asked whether the central bank can afford to discourage saving. Speaking at an event organized by the Bucharest Stock Exchange after the BNR cut the refinancing rate by 25bp (to 1.5%), Popa expressed views that were not entirely in line with the move, Agerpres reported.
He mentioned that the central bank has other instruments to achieve monetary easing, such as the required reserve ratio for foreign currency liabilities.
The BNR board member admitted that there is a need for a lower cost of credit in the market, but this should also be achieved by narrower margins charged by the banks.
In its press release issued along with the monetary rate cut, BNR said that the spread between lending and deposit interest rates for new loans has narrowed during the second quarter of the year - but Popa mentions the real negative deposit interest rates.
"We want to cut costs for the real economy. The BNR has made three interest rate cuts in this regard, but the lower cost must also come from the spread," Popa said at the "Financial Market Pulse" event organized by the Association for Investor Relations in Romania (ARIR).
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