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WB economist: BNR can use leu appreciation to control inflation

The National Bank of Romania (BNR) could allow the appreciation of the leu to get inflation closer to the targeted interval this year, Catalin Pauna, the senior economist of World Bank Office in Romania told Bloomberg.

The central bank could use a more powerful leu to control prices once economic growth returns, in the context of a rising inflation because of high costs of fuel and food at world level, Pauna added.

'Bringing inflation to this year's target of the central bank will be a challenge and will need adequate measures and policies. The bank could use the exchange rate policy. It is a clear impact on inflation in the appreciation of the leu and it is pretty fast,' the World Bank economist showed, according to Mediafax.

The BNR inflation target is 3% +/- 1% this year and the estimated rate for the end of the year is 3.6%. Adrian Vasilescu, the BNR governor's councilor had declared previously that the estimate may be modified to 5%.

Pauna anticipates that inflation could drop significantly in the second half of the year. 'Personally I expect pressures in the sense of the appreciation of the leu, while the economy recovers,' he said.

BNR established on Wednesday a reference rate of 4.0858 lei/euro, 4.6% less than at the end of 2010.

Sursa: http://www.actmedia.eu

Tags: inflation economist appreciation bnr euro

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