October 3, 2017 / 10:48 AM / a year ago

Romanian central bank holds key rate, narrows deposit/lending rate corridor

BUCHAREST, Oct 3 (Reuters) - Romania’s central bank kept its benchmark interest rate unchanged at a record low 1.75 percent as expected on Tuesday, but changed its overall policy by narrowing the corridor between its deposit and lending rates.

The symmetrical corridor between the two rates will fall to 1.25 percent as of Oct. 4, from the current 1.50 percent, which will affect interbank rates and boost the effectiveness of its benchmark rate.

Romanian inflation stood at 1.2 percent at the end of August. But higher electricity and gas prices, as well as a hike in fuel taxes have triggered expectations of higher inflation.

The central bank targets inflation at 1.5-3.5 percent this year and next. Governor Mugur Isarescu is expected to provide details on Friday’s decision from 1200 GMT. (Reporting by Luiza Ilie; editing by Radu Marinas)

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