Mugur Isarescu: Low interest rates period is over; we’re juggling inflation

Anca Alexe 08/05/2018 | 08:55

National Bank governor Mugur Isarescu said yesterday that BNR will maintain a distance between interest rates and inflation, and that those who think interest rates will continue to rise because they need to reach the level of the inflation rate are mistaken.

“There was a period of almost 10 years with very low interest rates, but it has passed. Normalisation, meaning that we will reach positive interest rates, is a process that we can’t plan for the future, but in Europe there are still negative real interest rates and our interest rate is under the inflation rate,” Isarescu said.

He added that interest rates won’t grow as to reach inflation rates and that the Bank will maintain a distance: “I don’t know whether it will be the same as in Europe, the markets will tell us. In Europe, the difference between inflation and interest rates is about 2 percent. For now, in Romania it’s also at 2 percent and this difference will be maintained.”

“I would like this inflation curb to decline, for the interest rate curb not too climb too much and at one point they will meet at a level that is very close to what we’ll find in Europe,” Isarescu stated.

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