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October 25, 2021

FinMin Citu: It’s the first time in history when fiscal and monetary policy work nearly perfectly

It’s the first time in history when fiscal and monetary policy work nearly perfectly, stated, on Monday evening, at private broadcaster B1TV, the Minister of Public Finance, Florin Citu, mentioning that the message given by the National Bank of Romania (BNR) is very important.

“Besides the relaxed fiscal policy we now have another impulse. We have the monetary policy which comes in support and I tell you it’s an important weapon in helping the economy. Besides it, I saw that analysts, economists already took into account the information from the first quarter and are giving high chances to what I’m saying for a month now: a return of the V-shaped economy, a recovery in the third quarter. And here’s what I’m counting on in the second quarter: the mix of fiscal and monetary policy. This matter which was presented only theoretically and I saw written in recent years in Romania. I believe it’s the first time in history when the two policies, the fiscal policy and the monetary policy are working, I believe, almost perfectly. I tell you, the message today from the central bank is a very, very important message. It mustn’t be ignored because today we ensured that in the second quarter we have chances to end up far better than we estimated two months ago,” said Florin Citu.

The Minister of Finance emphasized that this year the budget saw the allotment of money for investments, more than last year, representing nearly 10 pct of the GDP.

“The money comes from loans. At this time, Romania has a budget deficit, it’s a matter we all know, and we’re loaning, but we’re loaning for investments. It’s true that we are loaning also for the expenses side: salaries, all the bills, etc.” Florin Citu also said.

He mentioned that the budget deficit is financed through bonds’ emissions.

The governor of the National Bank of Romania, Mugur Isarescu, announced on Monday that the immediate objective of the central bank is still to ensure the necessary liquidity to finance the expenses of the state and the real economy, in conditions of relative stability of the exchange rate and gradual and sustainable reduction of interest rates.

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