Romania’s central bank cuts key rate by 75 bps to 17 pct

BUCHAREST (Reuters) – Romania’s central bank (BNR) has cut its key interest rate by 75 basis points (0.75 percent) in response to an ongoing decline in inflation helped by a strong currency, the bank said yesterday. Inflation in the European Union candidate, which hopes to join the bloc in 2007, has been gradually on the decline this year and the central bank expects to bring the annual rate to 9.4 percent at the end of this year from 14.1 percent in 2003. «To validate the slowing inflation process, the BNR board decided to cut the rate by 75 basis points to 17 percent,» it said in a statement. The rate is used to drain deposits from the money market. Helped by the strengthening of the leu currency, which acts to dampen price pressure, the central bank has been gradually lowering rates since June in order to boost investment. Last month it cut the rate twice by a total 100 basis points.