Repeated increases place Romania among EU states with highest key interest rate
Romania’s central bank recently hiked the key interest rate up to 4.75%, placing the country in the EU’s top 5 countries with the highest key interest rate.
Romania’s key interest rate is the same as the one in Iceland, but it is below the one in Poland (6.5%), the Czech Republic (7%), and Hungary (7.75%), according to Agerpres.
Outside of EU countries, Ukraine has the highest key interest rate on the continent, at a whopping 25%. Moldova comes in second with 18.5%, followed by Turkey (14%), Belarus (12%), and Russia (9.5%).
The abovementioned countries also face problems related to rising inflation to varying degrees, with Turkey reaching an inflation rate of almost 80%.
Countries in the EU are also affected by inflation, albeit to a lower extent. Hungary’s inflation level edged close to 12% in June, while Romania’s reached 15%, almost matching Poland’s own inflation rate.
The Hungarian and Polish central banks both hiked the key interest rate last week in an effort to control inflation. The Hungarian forint, however, continued to devaluate relative to the dollar and the euro, as investors flee developing markets for harder currency.
The euro also nosedived relative to the dollar, the two currencies being close to parity for the first time in 20 years. The single currency has been weakened by concerns over the war in Russia and a potential total stop of Russian gas coming into Europe.
Key interest rates are set to rise in the US and Europe as well, with central banks seemingly willing to slow down economic growth in exchange for bringing down inflation back to an optimal 2%.
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