No Change Made in Romanian Monetary Policy

February 3, 2011

The National Bank of Romania left its monetary policy rate unchanged at 6.25%, its level since a 25-basis point cut last May 4th.  There were five rate cuts from February 2009 to September 2009 totaling 225 basis points followed by a further 175 basis points of rate reduction in four increments last year.  The central bank left its reserve requirements unchanged.  Deficient private credit expansion remains a problem in Romania, but a VAT hike-induced jump in consumer price inflation raised such from a 12-month 4.4% rate of increase last June to 8.0% in the year to December.  Officials expect inflation to fall significantly once the value added tax hike drops out, and they will be releasing a quarterly Inflation Report next Monday.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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