Ooni Koda
  1. Home
  2. /
  3. Newsfeed
  4. /
  5. Suciu: BNR tries to reduce inflation expectations by...

Suciu: BNR tries to reduce inflation expectations by increasing monetary policy interest rate

January 24, 2022

The Romanian Central Bank (BNR) tries to reduce inflation expectations by increasing the monetary policy interest rates and slow down price increases for other components, in conditions in which over 70% of the inflation component is determined by energy prices, said Dan Suciu, the BNR spokesman at Radio Romania News, according to Rador.   He said that an increase of generalized interest rate takes place at world level and he does not think there are many central banks which afford to increase the interest rate. Asked whether previous projections were too optimistic he answered that the deep impact and the spectacular increase rate of energy prices had not been anticipated. He said that in that situation there are two types of solutions, a combination of fiscal policies and of monetary policies.   He pointed out that it is a unique situation, since inflation causes in Romania, at least in the early 1990s, were domestic, concerning production capacities, and answering demand, therefore an inflation determined by high market demand.   “Now inflation comes from offer, because we have prices that explode beyond the existing demand, that is we do not have an additional demand for those products, but we have offers that come with additional prices for reasons beyond our domestic control. We have references of these energy prices which are international and in the context in which we had a price liberalization we choose a very high price component for energy in the inflation index. I repeat, over 70% of the inflation index comes from energy,”Dan Suciu said.   Asked how the National Bank can step in to keep the situation under control, he showed that the BNR intervention is indirect.   “Obviously we cannot change energy prices, but we can limit the pressure that leads to the other prices by limiting credit, by making money more expensive. We do it step by step. For the time being, we make money more expensive, step by step. For the time being, we had three steps of making money more expensive, so that the quantity of money that can wonder in an economy and can determine other prices to go up and be better appointed for,” the BNR representative said.

The text of this article has been partially taken from the publication:
ActMedia
Read in full - click here
[Feature] 15 years on: How are Bulgaria and Romania doing in the EU?

The latest European Commission health report puts the pair of south-eastern EU accession states last in terms of the overall lifespan of their citizens. Romanians and Bulgarian now die even younger than before.  

Good work, Volodya! Putin resurrects NATO

Saber-rattling over Ukraine puts US-led alliance center stage, downgrading EU.  

President Iohannis: Unification of January 24, 1859 demonstrates importance of project to catalyze energies of Romanian people

President Klaus Iohannis stated on Monday that the Unification of January 24, 1859, demonstrates the importance of the existence of a project to catalyze the energies of the Romanian people."The Unification of January 24, 1859 demonstrates the importance of the existence of a project that catalyzes the energies of our people. In trying times, Romanians […]

Minister Bogdan Aurescu proposed the organisation of a reunion of EU foreign affairs ministers in Kiev

The minister of foreign affairs, Bogdan Aurescu proposed the organisation in Kiev of a reunion of the EU ministers of foreign affairs, which could demonstrate the solidity of the European Union in Ukraine, in the context where Russian military forces are gathered at the Russian-Ukrainian border and the risks of this situation at the address […]

Survey: 42% of the Romanians consider that Russia will invade Ukraine, 65% consider that invasion is illegitimate

The data of an Avangarde survey which measures the public perception on the situation in Ukraine, at the command of G4Media, shows that 42% of the interviewees think that Russia will invade Ukraine, only 29% considering that the invasion will not take place. 64% of the interviewees see Russia as a threat for Romania, while […]

Energy Minister informs EC of Romanian authorities' plans to step up support to final consumers

Energy Minister Virgil Popescu, attending on Saturday an informal meeting of the EU Energy and Environment Ministers in Amiens - France, informed the European Commission about the Romanian authorities' plans to adopt additional short-term measures to step up energy support to final consumers."We had a new round of ministerial debates on the EU energy price […]