Romania c.bank keeps rates flat at record low

BUCHAREST, March 28 Fri Mar 28, 2014 7:00am EDT

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BUCHAREST, March 28 (Reuters) - Romania's central bank kept its benchmark interest rate unchanged at a record low of 3.50 percent as expected on Friday, ending a rate-cutting cycle that has lowered borrowing costs by 175 basis points since last July.

The bank started easing last year, later than its emerging European peers due to persistently high inflation. It eventually had scope to cut thanks to a bumper harvest which pushed consumer prices to an all-time low of 1.1 percent in February.

But the bank raised its end-2014 inflation forecast to 3.5 percent, the top end of its target range, driven by base effects, and said the economy faced risks from volatile emerging market capital flows.

Central bank Governor Mugur Isarescu will give details of the decision in a news conference at 1300 GMT. (Reporting by Radu Marinas and Luiza Ilie)

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