Romania in new rate hike to battle inflation

Bucharest  - Romania's central bank Tuesday raised its key lending rate to 9.75 per cent from 9.5 per cent, seeking to fight inflation with the fifth consecutive hike since October.

Reserve requirements for commercial banks were kept unchanged, a central bank statement said.

In March, inflation in Romania rose to an annual pace of 8.6 per cent, the highest in two years and well above the central bank's latest 2008 target of 5.9 per cent.

The ex-communist nation joined the European Union last year and has attracted foreign investment in banking, retailing and industry, where wages remain among Europe's lowest.

But a consumer credit boom, a steep rise in government spending and upward pressure on wages have combined with high global food and energy prices to fuel inflation. (dpa)