The National Bank of Romania on Tuesday cut its benchmark monetary policy rate by half a point to 7.5% to ensure inflation hit its 3.5% target over a two-year horizon.

The central bank also chopped a half point of its deposit facility rate, which fell to 3.5%, and the lending rate, which fell to 11.5%. The penalty rate for deficits of leu-denominated minimum reserve requirements will drop to 17.25% later this month.

The central bank said the cuts were "aimed at ensuring the convergence of