August 4, 2014 / 10:07 AM / in 3 years

Romania cenbank cuts interest rates in surprise move

BUCHAREST, Aug 4 (Reuters) - Romania’s central bank cut its benchmark interest rate by 25 basis points to a record low of 3.25 percent on Monday, surprising the market, helped by falling inflation.

It said in a statement it kept the minimum reserve requirement on commercial banks’ leu-denominated and hard currency liabilities unchanged. The market had expected flat rates at 3.50 percent.

The bank ended a rate-cutting cycle that has lowered borrowing costs by 175 basis points in March 2014. It began easing last year, later than its emerging European peers due to persistently high inflation.

But with inflation hitting consecutive fresh lows, reaching a record 0.7 percent in June, some investors said it could have scope for more easing. (Reporting by Radu Marinas)

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