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Isarescu: We will be left with a rate of monetary policy under the rate of inflation, but this is the trend

The National Bank of Romania will stay with a monetary policy rate under the rate of inflation but this is the trend in Europe and the world, and the institution has no way to get out of this new paradigm of the negative interest, stated on Wednesday the governor of the National Bank of Romania, Mugur Isarescu during a press conference.

‘No, as even if we get within the interval, I don’t think, we could see what is going to happen until next year. You see, even in the press release it is underlined this dependence on the foreign environment, the European, international one, our zone, the countries we compare to. And now I will tell you why I don’t think, because I don’t see (…) the inflation going  towards 2.5%. So, we will be left with a rate of monetary policy under the rate of inflation but, to speak metaphorically, this is the fashion in Europe, and in the world, and we can’t escape this new paradigm, of the negative interest, as we live in Europe, we are in the European Union and we have the economy open to capital flows. We are careful that our decisions of monetary policy do not aggravate imbalances already existing and you have noticed that we focus on the imbalance of current account’ Mugur Isarescu said, asked if the dropping of inflation of next year within the target interval will happen without the necessity to modify the present route of monetary policy.

He mentioned that for the imbalance of current account was used the word ‘ worrying’ and there is a concern of BNR that this will not deteriorate.

‘ It is not exaggerated, to be well understood, against the period of 2006-2009, when it was about 12 and 14% is about 5% but if you look what happens in Europe we are, I think, alone with this current account deficit and I have no intention to influence it in a negative way’ Mugur Isarescu said.