07.07.2022

THE ROMANIAN CENTRAL BANK RAISED ITS KEY INTEREST RATE BY 100 BASIS POINTS

The Central Bank of Romania raised its main interest rate by as much as 100 basis points to 4.75%, while the expectations of the financial markets were for a tightening of the interest rate by 75 basis points, BNR reported.

The new Romanian interest rate of 4.75% is the highest since July 2013.

This rate hike is the sixth since the central bank began the process of normalizing its monetary and interest rate policies last October and the biggest single rate hike since the global financial crisis in 2008, as the central bank tried to catch up with Eastern European its partners, which are fighting rising inflation through a series of rate hikes.

In Romania, inflation jumped in May to an almost 19-year high of 14.49%.

The central bank expects inflation to rise more than expected in the short term and remain in double digits at least until the second quarter of next year.