National Bank of Romania

February 7, 2018

NBR Board members agreed to a second straight monthly monetary policy rate hike of 25 basis points to 2.25%. The moves in January and now February represent a directional shift. The rate had been reduced seven times starting in August 2014 to 1.75% by May 2015. Rate reversal comes against the backdrop of strong consumption-led economic growth and an acceleration of inflation that is now 3.3% and forecast to climb higher in the near term. According to today’s released statement, “the path of the forecasted annual inflation rate has been revised upwards in the short run, mainly due to the relative strengthening of recent and anticipated inflationary effects of supply-side factors, as well as to pressures from fundamentals.┬áThe uncertainties and risks surrounding this outlook stem primarily from the fiscal and income policy stance, labor market conditions, as well as from developments in administered prices.”

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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