Romania: Inflation eases further in August
September 12, 2011
n August, consumer prices dropped 0.35% over the previous month, which followed a similar decline in July and marked the third consecutive monthly drop. The decrease was the result of lower food prices, which more than offset higher prices for services. Annual headline inflation dropped from 4.9% in July to 4.3% August. The reading represented the lowest level since April 2010 and undershot market expectations that had inflation dropping to 4.6%. As a result, annual average inflation dropped from 7.6% in July to 7.3% in August. At its 3 August meeting, the Central Bank left the monetary policy rate unchanged at a record low of 6.25% for the tenth consecutive meeting, as inflation slows and policy makers seek to rekindle economic activity amid the U.S. and European debt crises. The Bank will next meet on 29 September. The Central Bank has set a 3.0% inflation target for this year and next with a 1.0 percentage point tolerance margin. However, the Bank sees year-end inflation at 4.6% this year, and 3.5% in 2012.