2019 started
\nwith major turbulence on the Romanian currency market. The national currency,
\nthe LEU, has reached new historic lows as against the Euro from one day to the
\nnext. Rated at 4.66 lei in the first days of 2019, the Euro exceeded 4.7 lei in
\nmid January. The national currency also depreciated against the dollar and the
\nSwiss franc. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
Also in January,
\nROBOR, the Romanian Interbank Offer Rate, the main index according to which
\nvariable interest rates for credits in lei are calculated, has neared 3%, thus
\nputting further pressure on the Romanians who are paying interest rate on
\nloans. Turbulence also propagated to the political scene. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
The Social
\nDemocratic Party pressured the national bank to intervene on the market to save
\nthe LEU, making available the very government reserves worth almost 37 billion
\nEuros. The Alliance of Liberals and Democrats, the partners of the Social
\nDemocrats in the governing coalition, also criticized the governor of the
\nnational bank, Mugur Isarescu, whom they accuse of tolerating alleged
\nburdensome practices promoted by the commercial banks in establishing the ROBOR
\nindex. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
In another
\ndevelopment, according to data published by the central bank, the money supply
\nrose by almost 9% in December 2018 as compared to the same month of the
\nprevious year, which led to the depreciation of the LEU. A national bank
\nadvisor on strategy issues Adrian Vasilescu said that the developments on the
\ncurrency market had more of a psychological effect and that the intervention of
\nthe central bank could be deemed appropriate only if the depreciation rate
\nexceeded 4% up to 5%. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
On Thursday the
\ncentral bank announced that, under its monetary policy, it would maintain the
\ninterest rate at 2.5% per year and would keep the current levels of the minimum
\nreserve requirement rates applicable to banks’ liabilities in the national and
\nin hard currency. After the meeting of the national bank’s Board of Directors,
\ngovernor Mugur Isarescu stated that they forecast a continuation of the
\ninflation rate’s downward trend followed by an upward trend of up to almost
\n3.5%. <\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
Mugur Isarescu: The new forecast scenario reconfirms the prospect of a continued drop
\nin the annual rate of inflation for the coming 3 quarters of the year down to
\nvalues that are slightly lower than those initially estimated. Then there will
\nbe an upward trend of the inflation rate that will be maintained at a value a
\nlittle under the superior ceiling of the target interval until the end of the
\nperiod of prognosis. The uncertainties and risks associated with the inflation
\nrate fluctuations are related to the new set of fiscal and budgetary measures
\nthat came into force on January 1 as well as to the government’s failure to finalize
\nthe 2019 draft budget, and implicitly to the future fiscal and income policy.<\/p>\n
<\/p>\n
\n
\n
\n
\n
\n
<\/p>\n
Governor Mugur
\nIsarescu also added that both the monetary and currency market were functioning
\nvery well and gave assurances that there was no indication of anti-competitive
\nagreements between banks for the establishment of the ROBOR index. <\/p>\n
\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Romanias central bank announced that under its monetary policy it would maintain the interest rate at 2.5% per year<\/p>\n","protected":false},"author":105,"featured_media":69454,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37738],"tags":[30253,32613,29713],"coauthors":[],"class_list":["post-80635","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-today-in-the-news","tag-mugur-isarescu","tag-robor","tag-the-leu"],"acf":[],"yoast_head":"\n