Asked how he comments the possibility that the European Central Bank, or ECB, might further cut the key monetary policy rate, Tariceanu said the ECB tries to boost lending for investment.
“When the confidence issues between banks in Romania end, the central banks can analyze and decide upon reducing interest rates. So, it is very possible, but it depends on the central bank, and not on the government,” Tariceanu added.
Romania’s central bank decided on October 30 to keep unchanged the key monetary policy rate at 10.25% on the year and to reduce the minimum required reserves ratio on leu-denominated liabilities of credit institutions to 18% from 20%.
The Organization for Economic Co-operation and Development, or OECD, estimates that ECB could cut the key monetary policy rate at 2% until next spring, from the current value of 3.25%, in order to fight against the recession in the Euro zone, in case the economic situation continues to worsen.
The European Central Bank reduced on November 6 the key monetary policy rate by 50 basis points, to 3.25% from 3.75%.
“The reduction of inflationary pressures in the next two years will permit an additional monetary policy rate in the following months,” the latest economic prognosis made by OECD shows.
According to OECD specialists, Europe’s Central Bank could keep the key monetary policy rate at 2% for almost one year.