Romanian financial group BCR, part of Erste bank group, argued that the latest (50bp) rate hike operated by the National bank of Romania (BNR) on November 8 marks the end of the monetary tightening cycle “at least for a while.”

The ambiguous formulation pointing to “a temporary end of the monetary cycle” similar to rather a halt or hiatus in the monetary tightening leaves, however, the door open for further rate hikes “if macro data make such hikes necessary,” as put by BCR’s analysts.

“We believe BNR will remain open to new hikes if the macro data require so,” reads BCR’s research bulletin quoted by Economica.net.

Indeed the BNR scheduled its next monetary board meeting no sooner than early January - when the first estimates for Q3 GDP will be available, as well as the inflation figures for November (if not preliminary estimates for the full year).

The monetary authority thus takes a break - but instead of hiking the rate a bit more, as it did in June and August, it opted for a moderate step on November 8, leaving the refinancing rate well below the CORE inflation while admitting that headline inflation would further rise towards the end of the year.

iulian@romania-insider.com

(Photo source: Gabriel Petrescu/Dreamstime.com)