Romania likely to cut rates further

Following today's decision to lower interest rates, the Romanian central bank hinted that further policy easing could be on the cards. The country's large external financing needs limit the scope for aggressive rate cuts. But, on balance, we think there will be one further reduction in interest rates this year. Elsewhere, the Polish National Bank left rates unchanged earlier today. The economic outlook is improving, but with inflation likely to remain below target over the next few years, we don't expect the Bank to turn to policy tightening until 2015.