IV. The Economic and Monetary Policy in Romania
IV. The Economic and Monetary Policy in Romania

Author(s): Mihaela Kardos
Subject(s): Supranational / Global Economy, EU-Approach / EU-Accession / EU-Development, Public Finances
Published by: Publishing Inc. European Readings & Prodifmultimedia/Editura Napoca Star
Summary/Abstract: Starting with the moment of Romanias accession in EU, it practically reached the first phase of participation to the Economic and Monetary Union (EMU). Romania has the obligation to prepare itself for the third phase of this state of economic integration, meaning the introduction of the single currency as a mean of payment. Up to the 1st of January 2007, it prepared the EU accession (Copenhagen criteria), including the liberalization of capital circulation, passing to Euro reference (March 2003), law modifying the National Romanian Bank (NRB) statute (end of 2004), passing to the strategy of monetary policy based on inflation targeting (August 2005). After the accession, Romania must demonstrate efforts for respecting the Maastricht criteria for participation to Exchange Rate Mechanism (ERM) 2. In this context, the first measures were already taken: a policy of inflation direct targeting by NBR, continuing the liberalization of the capital account transactions, functioning the Electronic Payment System, redenomination of national currency. Regarding the inflation rate, it is continuously decreasing, 2004 was the first year with an inflation of a single figure. The prognosis for 2007 is an inflation rate of 4.5%, 3.5% for 2008 and 3% for 2009.

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