New crusade against inflation

NBR Governor Mugur Isarescu announced that authorities were putting together an action plan to cut inflation. The plan is intended to provide a few surprises, so that it is kept secret for the time being.

Finance minister Mihai Tanasescu only says that “the monetary policy will focus on a tight ROL exchange rate policy,” without volunteering further details.

“Credibility and trust in this action plan play an essential part; this is why it should be announced all at once. There must be a certain surprise element to it,” Mugur Isarescu said in an interview for a central daily.

Adrian Vasilescu, adviser to the NBR governor, told Ziarul Financiar that the new programme would include solutions such as instating the currency board and pegging the ROL to a specific currency, at a fixed rate.

At the same time, the plan does not consider the “striking off some zeros” solution, either. “This is not about a currency board and I sure hope Romania will never end up having to use it.

As neither is it about striking some zeros off the ROL’s tail. I think this will happen some time over the next years. Maybe even next year,” Adrian Vasilescu says.