Governor of the National Bank of Romania (NBR), Mugur Isărescu told a press conference on Tuesday that the central bank’s forecast for the upcoming months points that inflation will continue its downward trend and a slight decrease will follow up to the higher end of the range, up tp 3.5 percent.
„These are our data, with the necessary risks, which are related to the prices that we cannot control. The inflation that we can influence has decreased, below 2.7%, slightly near our monetary interest rate and below the interests on the monetary market. The trend will go on next year as well, of softened decrease,” Isarescu said.
Referring to ROBOR, the BNR governor pointed out the fluctuations are lower, but reasonable for the central bank.
„There will be still movements ranging from 3.1 pc to 3.4 pc. The same goes for the upcoming period”, Isarescu argued.
The new quarterly Inflation Report was presented to the public in a press conference on 8 November 2018. The next monetary policy meeting of the NBR Board is scheduled for 8 January 2019.
In today’s meeting, the NBR Board examined and approved the November 2018 Inflation Report, which incorporates the most recent data and information available. The new scenario of the projection reconfirms the prospects for the annual inflation rate to decline further towards the upper bound of the variation band of the target in December 2018, before dropping and remaining in the upper half of the band until the end of the forecast horizon.
The uncertainties and risks surrounding the inflation outlook stem mainly from developments in fuel prices worldwide, in administered prices (natural gas and electricity), in the prices of food items and tobacco products, as well as from labour market conditions and the fiscal and income policy stance. Also relevant are the pace of euro area and global economic growth amid protectionist trends and Brexit-related uncertainties, as well as the monetary policy stance of the ECB and of central banks in the region.
Based on the currently available data, the Board of the National Bank of Romania decided to keep unchanged the monetary policy rate at 2.50 percent per annum; moreover, the NBR Board decided to leave unchanged the deposit facility rate at 1.50 percent per annum and the lending (Lombard) facility rate at 3.50 percent per annum. In addition, the NBR Board decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.
The NBR Board decisions aim to ensure and preserve price stability over the medium term in a manner conducive to achieving sustainable economic growth and amid safeguarding financial stability. The NBR Board underlines that the balanced macroeconomic policy mix and the implementation of structural reforms designed to foster the growth potential over the long term are of the essence in preserving a stable macroeconomic framework and strengthening the capacity of the Romanian economy to withstand potential adverse developments.