Exchange rate, no threat for inflation

The Governor of the National Bank of Romania (NBR), Mugur Isarescu, feels a higher appreciation of the single European currency against the dollar – even as high as to reach $1.2 for 1 euro, will make no inflationary impact on the Romanian market. The only thing that needs to be done, though – if the inflation target is to be attained as anticipated early in the year (13%-14% i.e.), is keeping the overall economic policies, especially the fiscal, wage or restructuring strategies, on course. Asked whether the banks had reacted to the signals the central bank had conveyed lately, pointing to the much too low interests on deposits, which pushed savings down, Isarescu explained, “the interests on deposits had decreased too much. Even though they only went up a little bit and not directly, the decline was halted and, as the inflation kept going down, the interests took an upward trend in real terms.” ZF