Romania's central bank left its monetary policy rate steady at 1.75 percent, saying its latest inflation report re-confirms that inflation is expected to remain negative over the next three quarters before turning positive but still remain below the lower bound of its target range until early 2017.
The National Bank of Romania (NBR), which cut its rate by 350 basis points from July 2013 through May 2015, added that the new quarterly inflation report will be presented on Nov. 9.
In its August inflation report, the NBR forecast annual consumer price inflation of minus 0.3 percent by the end of this year and 0.7 percent end-2016 before rising to 2.9 percent at the end of the first and second quarters of 2017.
In September Romania's headline inflation rate was minus 1.7 percent, up from minus 1.9 percent in August and the fourth month in a row of deflation.
The NBR, which targets inflation of 2.5 percent within a 1 percentage point range, also said in August that the cut in the Value Added Tax rate to 19 percent from 24 percent and lower fuel excise duties should keep inflation negative until May 2016, hitting an all-time low of minus 2.8 percent at the end of the first quarter of next year.
Excluding the impact of the cut in VAT inflation end-2015 was projected to reach 2.8 percent and then 2.4 percent end-2016.
The central bank also said leu-denominated loans had risen to 50.2 percent of the loan stock, outstripping for the first time in about eight years the share of loans in foreign currencies, a shift that will help the monetary policy transmission and mitigate risks to financial stability.
The National Bank of Romania issued the following statement:
"In its meeting of 5 November 2015, the Board of the National Bank of Romania decided the following: