BNR to discuss inflation target with new Cabinet

Mugur Isarescu, Governor of the National Bank of Romania (BNR), explained yesterday why Romania does not need funds from the International Monetary Fund (IMF). "You can see how large our reserves are; we have no place to put these," he said, regarding the €1.3 billion increase in the foreign currency reserve, up to €29.2 bln.

The increase is mainly due to gains obtained from speculation against the leu, and the fueling of the European Commission's euro account in Romania, as well as the appreciation of the dollar component of the reserve.

Isarescu used this increase to state again that there are no direct effects of the financial crisis on Romania, but warned that there may be indirect effects, caused by a rise in the price of financing, as well as local effects, which he referred to as a "nervous breakdown." Moreover, the Governor said that while the drop of certain economic indices should lead to disinflation, electoral pressures tend to boost inflation.

"We will announce the new 2009 inflation target in the first quarter of next year, after discussing this with the new government," added Isarescu. He mentioned that he has not been invited by any political party to head the new executive

Business Standard