Wednesday, May 7, 2008

Romania in new rate hike to battle inflation

Romania’s central bank Tuesday raised its key lending rate to 9.75% from 9.5%, seeking to fight inflation with the fifth consecutive hike since October.

Reserve requirements for commercial banks were kept unchanged, a central bank statement said. In March, inflation in Romania rose to an annual pace of 8.6%, the highest in two years and well above the central bank’s latest 2008 target of 5.9%. The nation joined the European Union last year and has attracted foreign investment in banking, retailing and industry, where wages remain among Europe’s lowest. But a consumer credit boom, a steep rise in government spending and upward pressure on wages have combined with high global food and energy prices to fuel inflation. (m&c.com)

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