Romania: Inflation hits almost 3-year high
May 10, 2011
In April, consumer prices increased 0.66% over the previous month, which was slightly above the 0.60% print recorded in March. The rise mainly reflected elevated prices for food and non-food items, while prices for services dropped slightly. Annual headline inflation rose from 8.0% in March to 8.3% April, which marked the highest level since July 2008. The increase surprised market analysts, who saw inflation edging up to 8.2%. Annual average inflation jumped from 6.8% in March to 7.2% in April. Despite the elevated rate of inflation, at its 3 May meeting the Central Bank left the monetary policy rate unchanged at 6.25%, the same result arising from its last eight meetings. In addition, the Bank maintained the same reserve requirements on both foreign-exchange and leu-denominated liabilities. The Bank will next meet on 29 June. The Central Bank has set a 3.0% inflation target for this year with a 1.0 percentage point tolerance margin. However, the Bank raised its year-end inflation forecast from 3.6% to 5.1%, and from 3.2% to 3.6% in 2012.