Acasă » General Interest » Popa: Energy prices have been passed on in foods, NBR tries to counterbalance the effects

Popa: Energy prices have been passed on in foods, NBR tries to counterbalance the effects

13 April 2022
Economics&Markets
energynomics

Energy prices have been transmitted to food, while services have felt less shocked, being less energy intensive, but the NBR is trying to counterbalance these “second round effects”, Cristian Popa wrote on his Facebook page on Tuesday. member of the Board of Directors of the National Bank of Romania.

“Inflationary pressures remain high, this time behind the evolution of inflation were foods, practically energy prices were transmitted to food, while services were less shocked, being less energy intensive. Transmission rate, the influence of growth energy prices are rising very fast and strong. Only the exchange rate can have a higher transmission rate than energy prices.The National Bank of Romania is trying to counterbalance these “second round effects” generated by energy, through a certain exchange rate stability. Higher interest rates help us to stabilize the exchange rate. We are still less than half the rate of inflation with interest rates, and with lower monetary policy interest rates than in Hungary, Poland and the Czech Republic. The effects of the second round will continue, and the NBR, knowing well that monetary policy cannot stop the energy crisis or the military conflict, however raised the interest rate by 0.5 percentage points,” said Cristian Popa, according to Agerpres.

The NBR started in the spring of last year by stopping the purchase of government securities, firmly controlling liquidity and raising interest rates.

“The measures will continue, they must continue. In addition, economic growth is slowing, the positive gap is closing, reducing inflationary pressures on the demand side. We have a major problem, which we know is difficult to solve in the midst of a major crisis (pandemic & border war): we have two major deficits. These are the fundamental problems. We have entered a pandemic with the biggest deficits, we are coming out of it similarly,” Cristian Popa added.

The annual inflation rate rose to 10.15% in March 2022, from 8.53% in February, as non-food prices rose by 10.86%, food prices by 11.20%, and services by 6.53%, according to data published on Tuesday by the National Institute of Statistics (INS).

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