The next monetary policy decision will take place on 6th May and we anticipate no change in the key rate, expected to stay at 3.50% for the next period. However, we anticipate that some measures of easing further the monetary conditions could be implemented before the end of this year depending on market conditions. 

The annual growth rate of Romania’s exports improved further in February, but this positive development was accompanied by a strong rise in imports – implying a rise of the trade deficit. Supported by good external demand, the annual growth rate of industrial production remained strong in February although it decelerated compared to January. Retail sales continued to show positive developments. On the other hand, activity in the construction sector remains poor, negatively influenced by activity in civil engineering construction works.

NBR data indicate an improvement of credit activity during March, with RON-denominated credit to both retail and corporate increasing. 

The temporary increase of short-term money market interest rates prompted the central bank to organise repo operations during April, for the first time since Q4 2013. The Ministry of Public Finance raised the amounts planned from the local treasury securities market, while on the external market it issued an Eurobond with maturity of ten years, the total amount raised being EUR 1.25bn at a very good yield of 3.7%.

Florentina Cozmâncă, Senior Economist

The Royal Bank of Scotland plc, Edinburgh, Romania Branch