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BUCHAREST, June 26 (Reuters) - Romania´s central bank raised interest rates by a quarter point to 10 percent on Thursday, tightening borrowing costs for the sixth time running in a bid to cool stubborn inflationary expectations.

 

Analysts expect the bank to wrap up the current tightening cycle after this hike that brought the total increases since October to 300 basis points, because inflation is expected to ease later this year.

 

"This should be the last interest rate hike in this cycle," said Ionut Dumitru, head of research at Raiffeisen Bank in Bucharest.

 

Central bankers had raised market expectations of a hike at Thursday´s meeting, signalling concern about overheating risks for Romania´s fast-growing economy.

 

The decision follows a similar move by Poland this week. Eastern European central banks have tightened rates considerably since last year as inflation has shot up to multi-year highs due to rising food and fuel prices and ravenous domestic consumption.

 

In May, Romanian inflation came off a two-year high of 8.6 percent hit in March, edging down to 8.5 percent. But many analysts expect annual price growth to peak in July when gas and power price rises come into force.

 

The central bank targets inflation at 2.8-4.8 percent at the end of this year and at 2.5-4.5 percent in 2009.

 

Ten of 14 analysts surveyed by Reuters last week saw a hike of a quarter point. All but one analyst expected rates to remain unchanged after the June increase or be cut by the end of the year, according to the survey.

 

The central bank will relase a detailed statement at around 3 p.m. local time (1200 GMT).

 

For a factbox of comments made by central bankers in the run up to Thursday´s meeting, double click [nL24496587].

 

(Reporting by Luiza Ilie; Editing by Gerrard Raven)

 

Keywords: ROMANIA RATES/

Editat Iunie 26, 2008 de tavi_star