On August 7, 2024, the Board of the National Bank of Romania (NBR) decided to cut the monetary policy rate from 6.75% to 6.50%, effective from August 8, 2024. This decision also included lowering the lending (Lombard) facility rate to 7.50% from 7.75% and the deposit facility rate to 5.50% from 5.75%. The minimum reserve requirement ratios on both RON- and foreign currency-denominated liabilities of credit institutions remain unchanged.<\/p>\n
The NBR decision<\/a> was primarily motivated by the continuing decline in the annual inflation rate, which fell to 4.94% in June 2024 from 5.12% in May. This reduction was driven by decreases in core inflation and fuel prices, though somewhat offset by rising natural gas prices. The inflation rate had also seen a notable drop from 6.61% in March 2024, largely due to falling energy prices and decelerating food price growth.<\/p>\n The annual adjusted CORE2 inflation rate also declined faster than expected, dropping to 5.7% in June from 7.1% in March 2024. This reduction was attributed to disinflationary base effects, downward corrections of commodity prices, decreasing import prices, and short-term inflation expectations. However, unit labor costs increased in early 2024, contributing to some consumer price rises amid strong demand for goods.<\/p>\n Economic activity in Romania showed mixed signals. GDP growth in Q1 2024 was modest at 0.7% compared to Q4 2023 and 0.5% compared to Q1 2023, with a significant contraction in gross fixed capital formation. Yet, economic indicators suggested a more robust growth in Q2 2024, with increases in retail sales, motor vehicle sales, and construction output.<\/p>\n The labor market experienced fluctuations, with a sharp contraction in employee numbers in May 2024 following a substantial rise in April. The unemployment rate gradually increased to 5.5% by June, slightly below the 2023 H2 average of 5.6%.<\/p>\n The NBR’s rate cut aims to maintain price stability and support sustainable economic growth. The decision reflects improved near-term inflation prospects but acknowledges ongoing uncertainties from fiscal policies, wage dynamics, energy prices, geopolitical tensions, and economic conditions in Europe.<\/p>\n The NBR remains vigilant and ready to adjust its policies to ensure medium-term price stability and financial stability. The next monetary policy meeting is scheduled for October 4, 2024.<\/p>\n editor@romania-insider.com<\/em><\/p>\n (Photo source:\u00a0318416965<\/a>\u00a0\u00a9\u00a0LCVA<\/a>\u00a0|\u00a0Dreamstime.com<\/a>)<\/em><\/p>","protected":false},"excerpt":{"rendered":" On August 7, 2024, the Board of the National Bank of Romania (NBR) decided to cut the monetary policy rate from 6.75% to 6.50%, effective from August 8, 2024. This decision also included lowering the lending (Lombard) facility rate to 7.50% from 7.75% and the deposit facility rate to 5.50% from 5.75%. The minimum reserve […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1215","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/1215","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1215"}],"version-history":[{"count":0,"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/1215\/revisions"}],"wp:attachment":[{"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1215"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1215"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1215"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}