The inflation rate prediction for 2008 was increased by the Romanian Central Bank (BNR) from 4.3% to 5.9%, but the institution decided to maintain its 3.8% annual inflation target for the year. BNR governor Mugur Isarescu declared on Thursday that the institution opts for harsher monetary policy, in order to maintain the inflation target. According to Isarescu, BNR intends to make more difficult the credit offering conditions and to make bank loans more expensive for employees with income calculated in Romanian lei (RON).
BNR expects an 8% inflation rate in the second quarter, followed by a progressive decrease in the second half of the year.
Isarescu explained that the main reasons to revise the inflation estimates because of the poor agriculture crops last year, which may influence this year production as well, and as well as because of the growing energy price, the international growth of the price for the oil barrel and the RON / euro exchange rate.
