Social Democratic Party (PSD) leader Liviu Dragnea made public on Friday his correspondence with Romania’s National Bank (BNR) governor Mugur Isarescu on the country’s economic situation.

In his letter to Isarescu in February, Dragnea said that the monetary policy needed to be connected to the fiscal-budgetary policies and that inflation was not caused by the government’s fiscal-budgetary policies as the central bank had said. He also blamed the BNR board members for inducing mistrust in the government.

In his reply, Mugur Isarescu said that the central bank had to act because of the rising inflation and that without a tightening of the monetary policy the inflation risks would have increased and would have led to a depreciation of the local currency. Isarescu’s answer came at the end of March.

Dragnea and Isarescu met on Thursday last week and settled their dispute after a three-hour long meeting to which prime minister Viorica Dancila and BNR’s first deputy governor Florin Georgescu were also present. The Government and central bank concluded that the high inflation rate at the beginning of this year was determined neither by fiscal-budgetary policies nor by the central bank’s monetary policy, but by “external factors”.

editor@romania-insider.com