Romania keeps rate unchanged at 5.25%

Romania’s central bank kept its main interest rate unchanged for the first time in eight months, halting a series of cuts after the currency plunged because of increased political risks. The political turmoil in the country triggered a sell-off in the country’s currency, which fell to an all-time low against the euro on May 1.

Romania, which secured a USD 6.6 bn precautionary loan from the IMF and the EU in 2011 to protect it from the debt crisis, is trying to reassure investors it will keep fiscal discipline and cut the budget deficit to 1.9% of gross domestic product this year after 4.4% in 2011. It hasn’t drawn any funds so far.

Source: Bloomberg