Maintaining the key interest rate protects borrowers, because an increase would lead to an increase in the cost of lending through ROBOR and IRCC, but an increase in the interest rate would also affect the cost of government debt, which would have negative effects on the entire economy, argues Claudiu Trandafir, financial expert.
"The National Bank of Romania (BNR) will not reduce the interest rate until it is sure that inflation is under control, in order to avoid new pressures on the exchange rate and on the economy. Practically, maintaining the key interest rate is the only decision that does not have a negative impact. If the projections for next year are real and inflation will decrease, then most likely we will talk about a change in the key interest rate", says Claudiu Trandafir, financial expert and founder of OferteBancare.ro.
According to him, the BNR's decision sends a clear message: financial stability and predictability are priorities, even if this means that rates will remain high in the short term.
According to the cited source, specialists estimate that a decrease in the key interest rate could be considered only after a significant moderation in inflation, probably in the first part of next year, if price developments and economic indicators allow this.
"The BNR chose to keep the key interest rate on the basis of a clear forecast and in order not to intervene excessively. An increase could have slowed the economy and risked an unjustified recession," says Claudiu Trandafir.
In the context of 10% inflation, the real interest rate is negative, approximately -4%, which will have a direct impact on deposits: money deposited in the bank will lose value.
"Negative real interest discourages saving and can stimulate consumption or speculation, fueling the inflationary cycle. In addition, it puts pressure on the exchange rate, as investors may prefer to move their savings to euros," Claudiu Trandafir added.
The Board of Directors of the National Bank of Romania decided on Wednesday to maintain the monetary policy interest rate at 6.50% per year, the central bank announced in a release.
OferteBancare.ro is a platform developed by Claudiu Trandafir, an economist and financial expert with over 25 years of experience in the financial and banking market.
Comentează