The National Bank of Romania (BNR) has increased the inflation forecast to 3% for this year and estimates an inflation of 3.1% next year, Governor Mugur Isarescu announced on Monday, during the presentation of the quarterly report on inflation.
In November 2018, BNR forecasted an inflation of 2.9% for the end of 2019 and of 3.2% for 2020.
BNR anticipates that the annual inflation rate will continue to fall until the third quarter of 2019 (2.4%) due to exogenous components and the consumer basket. Further on, the end of favourable effects related to lower fuel and citrus prices and will come to an end, and the influence of basic inflation will reposition inflation to the upper interval.
Governor Isarescu: Attacks on BNR – irresponsible, pathetic
Governor Mugur Isarescu said on Monday that the attacks from Government officials on BNR are irresponsible and pathetic, culminating with the one on Sunday from Darius Valcov, economic adviser to Prime Minister Viorica Dancila. “Look who is giving us advice,” Isarescu said, according to hotnews.ro.
“Such statements that someo
ne is playing with interest rates, is manipulating them, are more than dangerous. They should be wiped out by the reports. We issue four reports every year and we do it for 13 years. It is painful that many people do not read them, but bring charges in the press,” Isarescu said.
The Governor mentioned that attacks against BNR begun at the end of last year and continued this year, with regard to the exchange rate, ‘irresponsible charges’.
On the other hand, Governor Isarescu said the bank supports consumption, but by paying attention to doses. “What do they want? Not to look at the figures? This petty propaganda is not working anymore. The increase of the current account deficit is caused by the increase of consumer goods sales. We can see in the street , there are more cars that the highways’ capacity,” Isarescu said.
Reply to Valcov
“There is a wish of the economic adviser and of the Prime Minister to take care of Romanians’ welfare and request it to the Parliament, the Government. They ask to cut down interest rates. Look who requests this, imperatively! Well, they should come with an emergency ordinance reading that Romanians should live better, they should live as in Germany. We should discuss several issues repeatedly brought forward by the Premier’s adviser on economic issues. He takes 2-3 figures from one side and places them on the other side. He wonders why we have a higher key interest rate than in the Czech Republic or Poland. He really wonders! Look at the current account balance of Hungary or Poland, or to their budget deficits. One cannot look at some figures and ignore the others,” the Governor said.
Mugur Isarescu added that the PM’s adviser is not aware of the EU Treaty, as the BNR cannot receive advice. “He has channeled the talks on credit, this is dangerous! Mr. adviser has the only concern to attack credit and ROBOR. Well, ROBOR is the one bringing liquidity into the system. It’s like an attempt to the Treasury’s liquidity supply,” he said.
Isarescu said that, before making statements, discussions with the National Bank are advisable.
“He said for Bloomberg that the ROBOR should be reset. I don’t know about the settings needed, he said there’s an algorithm calculated by an international agency! Now he would say it has been given to the foreigners! I repeat, it is about the Premier’s economic adviser,” the Governor said.
“The adviser does not speak on behalf of the National Bank, and cannot speak on behalf of the National Bank. I really do not know on whose behalf he is speaking. From the way he talks, he hasn’t read the BNR reports. But he comments on monetary policy!” Mugur Isarescu said.