Romania keeps rates unchanged at 3.5 pct as expected

BUCHAREST Tue May 6, 2014 5:08am EDT

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BUCHAREST May 6 (Reuters) - Romania's central bank kept its benchmark interest rate flat at a record low of 3.50 percent as expected on Tuesday, with market players eyeing stable rates throughout 2014 due to inflation risks from volatile capital flows in emerging markets.

The bank ended a rate-cutting cycle that has lowered borrowing costs by 175 basis points in March. It began easing last year, later than its emerging European peers due to persistently high inflation.

It eventually had scope to cut because of bumper cereal crops which pushed inflation to an all-time low of 1.0 percent in March. It had indicated it would ease monetary conditions further by cutting minimum reserve requirements for banks' liabilities, after a surprise first cut earlier this year.

Central bank Governor Mugur Isarescu will give details of the decision in a news conference at 1200 GMT. (Reporting by Radu Marinas; editing by Matthias Williams)

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