The business cycle

Romania: Inflation forecast

By April 13, 2018 April 26th, 2018 No Comments

Inflation in Romania hit a five-year high in March, coming in at 5.0% yoy. With the NBR refraining from hiking rates last week, the real policy rate is left wallowing in historically low territory. While Governor Mugur Isarescu hinted that the NBR are waiting for market interest rates to absorb the effects of previous two hikes, yesterday’s data puts more pressure on it to act. We forecast two 25bps hikes in 2018E to bring the nominal policy rate to 2.75% by end of the year