Romania's Central Bank wants general VAT cut decision after IMF, EC talks

The Romanian Central Bank (BNR) expects the Government to make a decision on the general VAT cut from 24% to 20% starting next year, only after talks with the International Monetary Fund and the European Commission in the second part of May, said BNR governor Mugur Isarescu. The Romanian National Bank hasn’t come up yet with a scenario on the VAT cut consequences, as the Government hasn’t made the decision yet, reports local Mediafax. For the VAT cut on food and beverages from 24% to 9% starting June this year, the BNR estimates that the annual inflation rate will reach 1.9% at the end of next year. BNR has thus revised down the inflation rate from 2.4%. Isarescu said that the market doesn’t have a massive excess of liquidity. This is why BNR has reduced the minimum reserves for liabilities in lei held by banks from 10% to 8%. editor@romania-insider.com