Romania c.bank holds rates on high inflation

BUCHAREST: Romania's central bank held interest rates unchanged at 5.25 percent on Tuesday, as high inflation driven by food and energy limited its room to help a frail economy.

While emerging Europe neighbours Poland, Hungary and the Czech Republic have all cut rates to stimulate economies, Romania has kept rates flat since May 2012 due to price rises and political instability that has knocked the leu currency.

Inflation was at 5 percent at the end of 2012, above the central bank's target, and while the currency has stabilised after a December parliamentary election, pending energy price hikes are expected to keep inflation high.

The central bank targets inflation at 1.5-3.5 percent this year, while the IMF sees it at up to 3.7 percent. Economic growth is estimated at around 1.5 percent.

The majority of analysts polled by Reuters expect the central bank to keep rates at 5.25 percent - a record low for Romania but one of the highest in the European Union - throughout 2013.