Romania has raised interest rate more than expected

In Romania, which has been struggling with the highest inflation in 20 years, the Romanian Central Bank increased the interest rate to 75 basis points after the meetings.

The Romanian Central Bank increased the policy rate by 75 basis points to 3.75 percent after its meetings today. The forecasts of expert economists were below the realized interest rate. While the rate expectation was predicted as 50 basis points increase, it was recorded as 75. Romania lagged behind Poland, Hungary and the Czech Republic in curbing the rise in inflation. While these countries increased their interest rates earlier, Romania's CBT adopted a more cautious monetary policy due to the downside risks to the economy. The ongoing war in neighboring Ukraine, supply chain strains and high energy costs are affecting companies and household consumption negatively. Economic growth in the country is also expected to slow down rapidly. The focus is on the possibility of a technical recession in the middle of the year. Goldman Sachs economist Kevin Daly said: "External inflationary pressures have been exacerbated by the war. In the upcoming meetings, we expect inflation and tightening to continue."