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(Bloomberg) — Romania continued its speed of financial tightening, raising loan prices to the highest point in more than a decade to combat persistent inflation.
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Bucharest’s central bank on Wednesday raised its benchmark interest rate through 75 fundamental issues to 6. 25 percent, following a similar resolution at its last meeting in August. point step; A construction of 25 foundation themes is planned.
“Based on existing assessments, the annual inflation rate is very likely to remain on an upward trajectory towards the end of the year, under the influence of supply-side shocks, but at a visibly slower pace,” Banca Nationala a Romaniei. he said in a statement.
The leu extended its two-day winning streak against the euro, gaining 0. 1% after the decision. It is trading at 4. 9375 in line with the euro at 4:40 p. m. m. in Bucharest.
Ratemakers have opted for their ninth hike in the past year, even though they are still lagging behind the speed of tightening of other central banks in the region as they battle inflation to the highest point in just two decades at 15. 3 percent. The expansion of the value has not yet reached its peak given the geopolitical uncertainties brought about by Russia’s war in Ukraine, the central bank had to weigh the effect of the tightening economy and the leu.
“The higher-than-expected rate increase suggests the central bank needs to end the hike cycle in line with its Czech peers, at 7 percent,” Dan Bucsa, a London-based economist at UniCredit, said after the decision. The bank expects inflation to continue from here because of fuel and electric power value limits that apply to fewer families after a legislative adjustment in August. He also expects the value of food to rise further.
In its latest inflation projection, the central bank expects costs to remain in double digits until now next year.
(Updates with leu in the fourth paragraph, analyst’s comment in the sixth)
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