Romania: Inflation accelerates further in March
April 11, 2011
In March, consumer prices increased 0.60% over the previous month, which was down from the 0.77% rise recorded in February. The increase mainly reflected higher prices for food and non-food items, while prices for services dropped slightly. Annual headline inflation rose from 7.6% in February to 8.0% in March, which marked the highest level since August 2008. The jump surprised market analysts, who saw inflation rising to 7.6%. Annual average inflation rose from 6.5% in February to 6.8% in March. Despite the elevated rate of inflation, at its 31 March meeting, the Central Bank left the monetary policy rate unchanged at 6.25%, for a seventh consecutive meeting. In addition, the Bank cut foreign-exchange reserve requirements by 5.0 percentage points to 20.0%, in order to allow for higher lending from commercial banks, thus boosting the economy. The minimum reserve ratio on leu-denominated liabilities was kept at 15%. The Bank will next meet on 3 May. The Central Bank has set a 3.0% inflation target for this year with a 1.0 percentage point tolerance margin and expects inflation to end the year at 3.6%, before declining to 3.2% in 2012.