The Romanian Central Bank (BNR) could resume its monetary easing policy in the first half of 2011, after an increase in the sales tax introduced earlier this year has forced the process into a temporary halt, an official of the International Monetary Fund said Monday.  The central bank decided to "pause their easing cycle for a period, because they want to see the full effects of the value added tax increase and the effects on food prices of the recent flooding," Jeffrey Franks, head of the IMF mission to Romania, told Mediafax newswire.

He said the easing policy is likely to be resumed by the first half of 2011, provided inflation decelerates toward the central bank's target band and the VAT increase doesn't produce any second-round effects.

The BNR has kept the monetary policy interest rate at 6.25 percent in its most recent monetary policy meeting, at the same level as in the previous two monetary policy meetings.

Mediafax, editor@romania-insider.com