Tuesday, November 17, 2009

Romania Nov rate decision was not policy shift signal -Popa

VIENNA, Nov 16 (Reuters) - The Romanian central bank's decision on Nov. 3 to keep its key interest rate on hold at 8 percent was not meant to signal a policy shift, deputy central bank Governor Cristian Popa said on Monday. 

"The measure was a hold and not necessarily a change in the expected trajectory of interest rates ... But it's not meant to signal a turnaround in the trend so far," Popa told Reuters on the sidelines of a conference in Vienna.

Popa also said that with the bank's rate setting action and also due to a positive correction in the country's external balance, a big risk to the leu currency had been removed.
"I think the major element in fundamentals for the exchange rate to move is no longer there," he said.

"So far we have seen contained volatility in exchange rate. I don't think there are reasons, especially with an end to the political turmoil being foreseen as coming quite soon, for the exchange rate to move much more than it ha

s in the past."

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