Romania's headline inflation eased to just under 2.5% in September from 2.7% in August, falling under the center of the interval targeted by Romania's National Bank (BNR).

The overall consumer price index decreased by 0.14% mom in September.

The inflation rate was dragged down in September by food prices, which dropped by 0.55% month-on-month (versus 0.29% mom decline in August 2019).

The annual growth in food prices was nearly 5% in September, down from 5.5% in August.

The harmonized consumer price inflation calculated based on the EU-defined basket eased to 2.1% yoy in September, from 2.5% yoy in July-August.

BNR lowered its inflation forecast for December 2020 to 2.7% under its August Quarterly Inflation Report, from 2.8% envisaged in the spring forecast.

It maintained the forecast for 2.5% inflation at the end of 2021. In its latest action, on August 5, BNR cut the refinancing rate to 1.5%. The move came after the call by finance minister Florin Citu for "negative interest rates".

BCR chief economist Ciprian Dascalu argued in a recent comment that the BNR might maintain the monetary policy interest rate at 1.5% by 2022.

(Photo: Bizroug/ Dreamstime)

iulian@romania-insider.com