Central bank wants stable exchange rate as it easily influences prices


The Romanian central bank is ready to further narrow the gap between interbank rates and the monetary policy rate so that banks feel comfortable enough to resume lending, even if the move might reflect into a less stable exchange rate for the leu, bank’s chief Mugur Isarescu said Wednesday.

Isarescu mentioned that the current appreciation of leu against other currencies is circumstantial, generated mainly by the capital inflow on the background of the crisis in Ukraine.

He pointed out that the free floating of the exchange rate is not fit for a country like Romania.

It’s not very easy when the exchange rate oscillates that much. A very important appreciation can close down a factory, while the subsequent depreciation does not open it again immediately,’ the governor explained

 

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