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Romania's c-bank affirms 2019 inflation forecast at 4.2%

Romania's c-bank affirms 2019 inflation forecast at 4.2% National Bank of Romania. Author: Gabriel. Licence: Creative Commons, Attribution.

BUCHAREST (Romania), August 8 (SeeNews) - Romania's central bank said on Thursday it is maintaining its 2019 inflation forecast at 4.2%, while increasing its projection for 2020 to 3.4% from 3.3% predicted in May.

"Inflation will be kept under control in the medium term, even though two electoral years follow," central bank governor Mugur Isarescu said in a presentation of the bank's August inflation report.

Romania will hold presidential elections in November 2019 and general elections in December 2020.

The central bank, BNR, increased its annual inflation forecast for 2019 to 4.2% from 3% in May, outside its target band of 1.5-3.5%.

According to BNR, Romania's annual inflation rate will continue to be higher than the upper end of the target range over the entire 2019, following supply-side shocks in the first half of this year. Subsequently, inflation will re-position and maintain itself in the upper half of the target range as the effects of those shocks will fade away and inflationary pressures will continue to persist.

Romania's consumer prices rose by 3.84% year-on-year in June, slowing down from an increase of 4.1% in May, the national statistical office announced last month.

BNR maintained its monetary policy rate at 2.50% on Monday.

The central bank last changed its key rate in May last year, increasing it to 2.50% from 2.25%, the third rate hike in 2018.

(1 euro=4.7307 lei)