Romania cenbank unanimously voted to raise key rate to 3.75%

div classBodysc17zpet90 cdBBJodivpBUCHAREST Reuters – Romanias central bank board unanimously voted to raise the benchmark interest rate by a bigger than expected 75 basis points to 3.75 at its May 10 meeting as it expected sharply higher inflation, minutes published on Friday showed.p

pThe bank delivered its sixth consecutive rate hike in May saying it expected supplyside shocks amplified by the war in Ukraine to keep inflation into double digits until the second half of 2023.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pWith its headline rate the lowest among central and eastern European peers and a rising current account deficit, the banks board members said risks to the Romanian leu remained elevated.p

p“They referred to the size of the external imbalance and the uncertainties associated with budget consolidation amid the war in Ukraine, to the Fed‘s and the ECB’s prospective monetary policy stances, as well as to the significant local interest rate differential visavis countries in the region,” the minutes said.p

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pp Reporting by Luiza Iliep

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