Romania’s National Bank (BNR) expects the inflation rate to spike in the first quarter of next year and start going down in the second half of the year.

However, BNR won’t intervene in the market just yet by increasing the monetary policy rate.

“We expect a statistical inflation rate spike in the first quarter of 2018,” BNR governor Mugur Isarescu said in a press briefing.

“There’s no point in taking measures that stress the economy, but if the spike proves not to be just statistical, we will of course intervene,” he added.

The central bank’s board yesterday decided to maintain the monetary policy interest rate at 1.75% per year, but narrowed the symmetrical corridor of interest rates on BNR’s standing facilities around the policy rate to ±1.00 percentage points from ±1.25 pp. Thus, starting November 8, the deposit facility rate, namely the interest rate BNR pays to local banks that keep their liquidities at the central bank, rises to 0.75% per year, while the interest rate on the BNR’s lending facility is lowered to 2.75%.

editor@romania-insider.com