Romanian Central Bank governor: Down 1.25% this year, key interest rate could be further slashed

Romania’s Central Bank (BNR) still has “some room” for further cutting the key interest rate, after reducing it by 1.25 percentage points this year, says BNR governor Mugur Isarescu (in picture). He added that banks are expected to further reduce interests on loans in RON, especially for performing companies. “The decisions must be pondered […] I’d rather see a delay on their side, than to lower interests and then change them back, or to take subsequent decisions for growth. On any channel of monetary policy transmission, I accept a certain delay,” said the governor. BNR has recently cut the key interest for the fourth time this year, taking it down to 4 percent, from the previous level of 4.25 percent. The previous change in the interest rate was at the end of September, when it went down from 4.5 percent to 4.25 percent. Earlier in August, the Central Bank slashed the rate by 0.5 percentage points, from 5 percent. The first drop, of 0.25 percent, happened in July, and came after almost a year of keeping the key interest rate flat. Irina Popescu, irina.popescu@romania-insider.com