Selected Articles from IntelliNews Pro IntelliNews Pro

About IntelliNews Pro

IntelliNews Pro has been a trusted resource since 1999 for emerging market business and finance professionals engaged in the markets of Eastern Europe, Eurasia, MENA region and Africa. Users have direct access to locally based analysts to answer questions or gain insight into those markets.

Ask the Analyst from IntelliNews Pro

Romania’s central bank hikes monetary policy rate as expected

Question: Hello - did you see Isarescu commenting on a potential ideal gap between the policy rate and inflation during the Q&A pls?

Answers: Hello, indeed Isarescu touched this topic. But it was about the gap between inflation and money market interest rates [not policy interest rate]. What he clearly said, was that no one should expect the interest rates to rise in line with inflation soon [this would be bankers' wishful thinking, he implied between the lines]. He also mentioned that the [nearly] 2pp between the interest rates and inflation in Europe [euro area] is same in Romania [more or less, with the gap wider in Romania judging by numbers] at this moment. He did not say whether the gap will remain the same, but he implied that the developments in Romania should [and he stressed, in his opinion] converge to the developments in Europe. Both the interest rates and inflation in Romania should converge to same levels as in Europe , he also added. Isarescu also mentioned debates among monetary board's members about the process of normalisation of the monetary policy in Europe -- by normalisation meaning the return to real positive interest rates, sterilisation and monetary transmission mechanism as we know it. It is a process that impacts Romania significantly, he stated, and its dynamics is still unclear. [such normalisation would compress the 2pp gap and in fact, eventually, turn it negative -- our comments here ] In conclusion, the 2pp gap should be regarded as a dynamic target -- likely to follow the developments in the euro area. Because otherwise, combined with the 3.5% y/y yearend conflagration target it would result in 1.5% interest rates at the end of the year [which is unrealistic]. The bottom line: Isarescu's comments were not about the policy rate, but about the interest rates. whole speech here https://www.youtube.com/watch?v=ttY05QnX034 with the para mentioned starting min45  

Show Full Answer   More from Ask the Analyst

Iran’s supreme leader agrees to treat social unrest dead as “martyrs” to enable triggering of compensation

December 8, 2019

Iran’s Supreme Leader Ayatollah Ali Khamenei has said that those who died in the widespread social unrest seen in the country recently are to be treated as “martyrs”, opening the way for their ...

Greece expels Libyan ambassador in row over maritime boundaries deal with Turkey that ignores Crete

December 6, 2019

Greece said on December 6 it was expelling the Libyan ambassador as an expression of its anger over an ...

Slovenia’s competition watchdog clears €444mn Abanka acquisition by NKBM

December 5, 2019

Slovenia’s second largest bank Nova KBM (NKBM) has received clearance from the Competition Protection Agency to acquire the local Abanka in a €444mn transaction, NKBM said on December 5. The ...

Russia expels Bulgarian diplomat as relations worsen

December 5, 2019

The Russian foreign affairs ministry said on December 5 it has declared a Bulgarian diplomat persona non grata. Bulgaria’s ambassador to Russia was summoned to the Russian foreign ministry to be ...

Iran issues angry response to European letter to UN alleging Tehran has nuclear-capable missiles

December 5, 2019

Iran said on December 5 that a letter from three European powers to the UN Security Council accusing Tehran of having nuclear-capable ballistic missiles showed their "miserable incompetence" in ...

Turkey colludes with Islamic State proxies says Macron as spat over block on Nato’s Baltic, Poland defence plans escalates

December 3, 2019

French President Emmanuel Macron on December 3 accused Turkey of colluding with Islamic State proxies on the opening day of Nato’s London summit at which officials were discussing how to deal ...

Kosovo to join Albania's electricity grid from next April

December 3, 2019

Kosovo has signed a historic deal with Tirana to join Albania’s electricity grid as of next April, transmission system operator KOSTT said on December 2. The agreement signed between KOSTT and ...

Hungary ready to start talks on joining Eurasian Development Bank

December 2, 2019

Hungary is ready to start talks on joining the Eurasian Development Bank (EDB) as a full member, Finance Minister Mihaly Varga said at a conference in Moscow on November 29. Joining the EDB would ...

Albanian quake death toll rises to 51

December 1, 2019

The death toll in earthquake-hit Albania rose to 51 as the rescue operation for survivors in the country ended on November 29, the ministry of defense announced on November 30. The 6.4 magnitude ...

Hungarian businessman buys Thomas Cook's local subsidiary

November 29, 2019

A Hungarian investor has taken over Neckermann Magyarorszag, the Hungarian unit of bankrupt UK travel company Thomas Cook, local media reported on November 28. No details were revealed on the ...

Former deputy PM Babacan warns of “one man rule” and Turkey’s plight in “dark tunnel”

November 27, 2019

Former Turkish deputy prime minister Ali Babacan has warned of the dangers of “one man rule” and the “dark tunnel” that Turkey finds itself in, while saying that he hopes to have formed a new ...

Romania's ex-PM Dancila ousted from PSD leadership after losing presidential race

November 27, 2019

Former Romanian prime minister Viorica Dancila was forced to resign from the helm of the Social Democratic Party (PSD) after a six-hour meeting of the party leadership on November 26, a couple of ...

Iran, remaining nuclear deal signatories to meet in Vienna on December 6 to discuss how to uphold accord

November 26, 2019

Officials from China, Russia, France, Germany and the UK will meet with Iran in Vienna on December 6 to discuss how to uphold the 2015 nuclear deal with Tehran, the European Union said in a statement ...

Bulgaria’s president signs decree on new chief prosecutor, pushes for constitutional changes

November 26, 2019

Bulgaria’s President Rumen Radev ...

Estonian ruling coalition hit by resignation of another far-right minister

November 26, 2019

Estonia’s Prime Minister Juri Ratas dismissed Mart Jarvik, Estonia’s minister of agriculture, on November 25, following controversy over a conflict of interest involving one of his advisers. ...

Companies line up to fund football academy in Hungarian PM Orban's home village

November 26, 2019

The Ferenc Puskas Football Academy (PFA) named after Hungary’s legendary football player located in the prime minister’s home village Felcsut has received HUF1.1bn (€3.3mn) under the ...

Renaissance says Uzbek equities “could be interesting on 3-5 year perspective”

November 25, 2019

The analytical arm of Russia-based investment bank Renaissance Capital said in a report published last week that Uzbek equities “could be interesting on a three- to five-year perspective” as the ...

Study shows satellite discovered methane leak at Turkmenistan oil and gas field

November 25, 2019

Montreal-based GHGSat said in a study published on November 22 that it discovered a methane leak equivalent to the fumes of a million cars deriving from unlit flaring in the Korpezhe oil and gas ...

Kosovo’s Vetevendosje secures majority to form new government

November 24, 2019

The leader of Kosovo’s Vetevendosje party, Albin Kurti has secured a majority in the parliament to form a new government, he announced on November 24. On November 7, Kosovo’s central election ...

Slovenia’s parliament endorses two-year budget with opposition support

November 24, 2019

Slovenia’s parliament endorsed the draft state budget for 2020-2021 early on November 22 as PM Marjan Sarec managed to gain critical support from opposition parties after the Left party ...

Dismiss