Return of Inflation Unlikely to Break Romanian Rate Lock: Chart

The impending end of Romania’s longest bout of deflation since communism probably won’t sway the central bank’s resolve to keep interest rates at a record-low 1.75 percent any time soon. While the price-sapping effect of pre-election tax cuts is fading, Governor Mugur Isarescu is set to extend his rate pause to 11 meetings on Friday. He may stand pat through the end of 2017, says Mihai Patrulescu, an economist at UniCredit Bank in Bucharest who sees an ease in the consumption boom and “considerable uncertainty” from U.S. monetary policy and Brexit.

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