​​The decision of 9 members of the BNR Board of Directors on Tuesday was the decision that all economists expected: to maintain the current level of the key interest rate of 7%.

The most important phrases from the press release of the BNR:

• The dynamics of retail turnover in January 2023 continued to grow, but a decrease in services provided to the population was recorded. At the same time, industrial production emphasized its reduction in annual terms, and the volume of construction works significantly slowed down its growth compared to the corresponding period last year.

• The number of people employed in the economy continued to slow its growth in December 2022-January 2023, and the BIM unemployment rate only slightly decreased in January-February 2023 after rising to 5.7 percent in the fourth quarter of 2022.

• The main quotations of the interbank money market in February-March continued their downward movement against the background of excess liquidity in the banking system, but in conditions of its slowdown and stoppage until the end of the interval. At the same time, government bond yields recorded gains in February, which were fully adjusted in March – in line with developments in advanced economies and in the region – amid successive revisions to investors’ expectations about the outlook for monetary policy by major central banks, as well as turbulence, caused by the bankruptcy of Silicon Valley Bank and Signature Bank in the USA and the situation of the Swiss bank Credit Suisse.

• The national currency continued to show a strengthening trend against the euro in this interval in the context of the high relative attractiveness of lei investments, so that in the last days of March the lei/euro ratio gradually increased, returning to the proximity of the prevailing values ​​in the first semester of 2022.

• Annual growth in credit to the private sector continued to slow in the first two months of this year, but more moderately, reaching 10.6 percent in February 2023 from 12.1 percent in December 2022, as the growth rate slowed with the lei component, but also a quasi-termination of the upward trend high variation of credit in foreign currency. The share of the lei component in loans to the private sector continued to decline, however, to 68.3 percent in February 2023 from 68.8 percent in December 2022.

• Annual inflation is likely to accelerate its decline in the coming months according to the latest medium-term forecast (February 2023), under the influence of strong base effects and downward corrections in commodity prices, as well as against the background of changes in the characteristics of price capping and price compensation schemes on the energy carrier.

• Decisions regarding the monetary policy of the Fed and the ECB are especially relevant, which blur the movement of capital, as well as the attitude of central banks in the region.