Banca Transilvania chief economist expects monetary tightening but not above 2%

There are signs that the Romanian National Bank (BNR) is shifting from the monetary relaxation stage towards a new monetary cycle, chief economist of the Romanian biggest financial group Banca Transilvania, Andrei Radulescu, said in a conference over the weekend.

The refinancing rate will, however, not exceed 2% by the end of next year, which would preserve small real interest rates supportive for the economic development in the post-pandemic period.

BNR might hike the rate sometime toward the end of this year, but this decision depends on both the international context and the evolution of inflation, he said.

"The forecast for HICP inflation is 2.9% (annual average) in 2021 and 2.8% in 2022 and 2023. I expect the BNR to increase monetary policy interest rates but not to exceed 2% by the end of 2022 and 2023. In practice, the real ROBOR will continue to remain at a very low level, which is a boost for investment in both the real economy and in financial economics. We will reach 2% at the end of next year ", said Rădulescu, quoted by Economica.net.

(Photo: Octav Ganea/ Inquam Photos)