Senate: BNR Governor to be heard on Tuesday by the economic and budget committees

National Bank of Romania (BNR)  Governor Mugur Isarescu on Tuesday will have a hearing within the joint economic and budget-finance committees of the Senate, starting 11.00 am.

The head of the economic committee, Daniel Zamfir, specified that Mugur Isarescu did confirm his presence.

“From what I understood he will bring the entire Board of Administration with him, which makes us glad, for he finally understands the obligations of the Board of Directors of the BNR. We will discuss about ROBOR and the manner in which this indicator is being calculated and also about the report issued by the BNR late last year on financial stability and inflation. It will be a full day, with many questions to which I am certain Mr Governor will have answers. (…) We will also tackle the Leu-Euro exchange rate. We will talk for an hour or two. I believe that we will discuss all the topics worrying the population, the public opinion, right now and I see no reason why I should believe that we will leave the hearing as confused as we are now,” said Zamfir.

He also said that the hearing should clarify whether BNR influenced the ROBOR or not: “We should also clarify whether the BNR influenced the ROBOR or not, the exchange rate and what role the central bank plays in establishing the inflation target in our country.”


Governor Isarescu: BNR’s main objective in 2018 was achieved; we had fair, well-balanced policy


The main objective of the National Bank of Romania (BNR), namely the stability of prices was achieved in 2018, BNR Governor Mugur Isarescu stated on Monday, when presenting the Quarterly Report on Inflation, adding that the institution had a fair, well-balanced policy.

“For the past period, we have this development of the inflation rate. It entered again in the variation interval associated to the stationary target in Q4 2018, in line with our forecast. In other words, the main objective of this institution, the one related to the stability of prices, the main objective, was achieved, after a development that truly discouraged us in summer, to say so. We had a fair, well-balanced policy, by using several instruments, not only the monetary policy rate and we got to this result. Indeed, some external factors helped us. For instance, the steep drop of oil price on international markets, but, a year ago, the same factor not only it didn’t help us, but it raised serious problems,” Isarescu stated.

He mentioned that there was also a manifestation of some favorable basic effects in the group of processed food and electricity. This was the element that helped the BNR in the forecast according to which inflation will decline.

According to the BNR Governor, the most important thing is for the inflationary projections not to deteriorate when inflation reaches the 6 percent peak.

According to the Report, in line with the forecast trajectory, the annual CPI (the Consumer Price Index) inflation rate sharpened its downward trend in the last quarter of 2018. The indicator dropped to 3.4 percent in November and subsequently decelerated to 3.3 percent in December, thus consolidating within the range associated to the stationary target of 2.5 percent ą 1 percentage point.

In respect to the inflation outlooks, according to the baseline scenario, the annual CPI inflation rate will reach 3 percent by the end of 2019 and 3.1 percent by 2020. Compared to the previous Report, the updated scenario slightly revises upwards the forecast for the end of the current year by 0.1 percentage points, due to some higher contribution stemming from the annualized adjusted CORE 2 inflation rate, while the contributions of some other components of the consumer basket have been offset each other.

For December 2019 and December 2020, the cumulative contribution of exogenous components to the annual CPI inflation rate is foreseen to decrease significantly compared to the value recorded in December 2018 (1.8 percentage points) up to 0.9 percentage points and 1 percentage point, respectively.

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