The National Bank has managed to take most analysts by surprise with its decision to reduce the monetary policy rate from 8.75% to 8%, although it had become obvious that NBR's wish to consolidate the beacon role of the rate was already at odds with the situation on the market, where interbank rates were already much lower.

"The announced cut does nothing but show a move to rally to the market and to the inflation, because it was obvious that the real monetary policy rate had become very high. We will be able to better analyse NBR's decision in relation to the volume of purging during the future auctions. If the partial purging continues in spite of the rate decline, the new rate will be meaningless to the market," comments Mihai Bogza, Bancpost chairman and former NBR vice-governor.

He believes it is "fairer" for the NBR to cut the rate and purge the excess liquidity in full to really send a signal to the market, rather than maintain a barely relevant interest, while the purging is done only in part. "NBR's Board of Governors has decided to adjust the overall monetary conditions in accordance with the new context by cutting the monetary policy rate from 8.75% to 8%, by exerting, through market operations, a liquidity control adequate to the conditions on the financial markets and by maintaining the current level of the minimal mandatory reserve rates," the central bank announced after the meeting of its Board of Governors last Friday.

The NBR explains its decision by mentioning the factors that had determined "a strengthening of the restrictiveness of the overall monetary conditions," even in the absence of decisions of the central bank: the increase in the real margin of the monetary policy rate and the faster than anticipated RON appreciation, partly as a result of the larger capital inflows. The National Bank notes that the situation on the mone