ING: Romania's central bank spends EUR 1 bln to keep exchange rate under control

Romania’s National Bank (BNR) has spent from its reserve up to EUR 1 billion to keep the exchange rate below RON 4.6/EUR 1, ING Bank experts estimate, reports local Profit.ro. Inflationary pressures have accumulated after the Romanian state increased the excise fuel and announced increases in the price of energy and possible increases in gas prices. ING has revised upwards its inflation prognosis from 2.3% to 2.6% for the end of this year. The most recent official data indicated an annual inflation rate of 1.2% for August, although the market consensus presented a 1.5% inflation rate. The 3-month ROBOR level (ROBOR 3M), which most banks use in their lending contracts, reached 1.71% on Monday, October 2, up from 1.11% just one week earlier. The pressure on interest rates is the result of several factors, such as state-owned companies having to pay additional dividends of almost RON 2 billion and the central bank’s interventions on the exchange rate, according to ING. editor@romania-insider.com