Romanian central bank holds benchmark rate at 6.50%, flags inflation risk
Adds bank comment, updates throughout
BUCHAREST, Nov 8 (Reuters) -Romania's central bank held its benchmark interest rate ROINTR=ECI at 6.50% on Friday, its last meeting of the year, warning inflation may not return to target before 2026 while pending fiscal measures heightened uncertainty.
A majority of analysts had expected the decision, as widening budget and current account deficits ahead of presidential and parliamentary elections later this year have muddied the interest rate outlook.
Policymakers have cut interest rate twice this year during a calmer period of price growth, the last among their peers in Central and Eastern Europe to begin cutting rates.
Since then, the governor and two board members have warned inflation's downward trajectory would be more erratic. A board member told Reuters inflation may not fall back within the 1.5%-3.5% target until early 2026, later than expected.
The bank will unveil new 2024 and 2025 forecasts on Monday.
"The annual inflation rate will pick up slightly in the closing months of this year and will see a marked fluctuation in the first half of 2025,” the bank said in a statement.
"Significant uncertainties and risks stem from the future fiscal and income policy stance, given the fiscal-budgetary measures that might be implemented as of 2025 for budget consolidation purposes."
High spending ahead of presidential and parliamentary elections in November and December has widened the European Union state's budget and current account deficits. In October, rating agency S&P said inflation will likely stay above target through 2027.
Romania has yet to unveil a 2025 budget, with the coalition government mulling a seven-year timeframe to bring the country's deficit below the bloc's ceiling of 3% of economic output from an expected 7.9% this year.
"Our forecast that the policy rate will be cut to 5.25% by the end of next year had been a more hawkish forecast," said Capital Economics emerging Europe economist Nicholas Farr.
"We will review our forecasts after the elections next month, but the balance of risks are now clearly skewed to less easing next year."
The Romanian leu was flat versus the euro after the rate decision.
Reporting by Luiza Ilie
Editing by Christina Fincher
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
