NBR is gearing up for inflation caused by internationally rising prices for food and fuel, pushing leu higher and driving interbank interest rates up to the level of the monetary policy rate. This is the explanation analysts and dealers have found for past week's unexpected developments on financial markets.
The next step would be raising the benchmark interest rate from the low of 6.25% per annum, where it has stayed since last May, but the time such a decision will be made is still uncertain.
"NBR has probably come to worry about what's happening with inflation and is rather preparing for 2012 than for 2011, because the impact of the interest channel is felt over a longer term. Virtually, they wanted to get back to the position of net lender to the banking system, judging by the high volume of interventions. They sold a lot of foreign currency in several days and took a lot of liquidity out of the system," says Nicolaie Alexandru-Chideşciuc, chief-economist with ING Bank.
The NBR has an official inflation target of 3% for this year and of 2.5% for next year.
NBR is gearing up for inflation caused by internationally rising prices for food and fuel, pushing leu higher and driving interbank interest rates up to the level of the monetary policy rate. This is the explanation analysts and dealers have found for past week's unexpected developments on financial markets.
The next step would be raising the benchmark interest rate from the low of 6.25% per annum, where it has stayed since last May, but the time such a decision will be made is still uncertain.
"NBR has probably come to worry about what's happening with inflation and is rather preparing for 2012 than for 2011, because the impact of the interest channel is felt over a longer term. Virtually, they wanted to get back to the position of net lender to the banking system, judging by
