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Romania Needs To Strengthen Efforts To Reduce Inflation – Isarescu

Romania needs to strengthen its efforts to bring down inflation as this is already at a high level and there is little time left until the accession to the eurozone, central bank governor Mugur Isaresc said Tuesday.
Romania Needs To Strengthen Efforts To Reduce Inflation - Isarescu
24 iun. 2008, 13:00, English

"In order to be trusted that you have a low inflation when you enter the exchange rate mechanism, you should have brought it down two years before.
That means we have to strengthen our efforts to bring it down in 2010 – 2012," Isarescu said.

Romania plans to enter the ERM II exchange rate mechanism in 2014.

He said the Romanian inflation still shows structural elements, which means it can be lowered using monetary policy measures.

"The current account gap must be narrowed as well, because nobody will believe you if you have a low inflation and a high current account deficit, Isarescu said.

The governor said that an essential element to reduce inflation is the structural reform process, which will assure a good environment for higher productivity.

Romania’s consumer price index picked up 0.49% on the month in May, on higher prices for food products and fuels, bringing the annual rate to
8.46%.

The central bank has set an inflation target of 2.8%-4.8% for this year, but expects inflation to exceed the interval and end at around 6% in 2008.