Thursday, August 4, 2011

Romania needs prudent policy to tackle CPI risks

Aug 3 (Reuters) - Romania needs to continue keeping a prudent monetary policy stance to counter significant upside risks to inflation stemming from future energy price hikes, volatile capital inflows and debt crisis concerns, the central bank said on Wednesday.

Earlier in the day the bank held its benchmark interest rate ROINTR=ECI unchanged at 6.25 percent as expected, a record low but the highest among its neighbours. 

Analysts widely expect interest rates to remain where they are unitl April-June 2012, when most of them see the central bank cutting borrowing costs.

The central bank said inflation will fall faster in coming months supported by a good harvest year and the fading out of the impact of a value added tax hike last year. (Reporting by Luiza Ilie; Editing by Radu Marinas)

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