For 2013, the central bank estimates an annual inflation of 3% at the end of December, also unchanged from its previous prognosis.
“Four of the five main channels that could trigger inflationary risks are leaning to the upside and only one of the channels is relatively balanced,” central bank governor Mugur Isarescu said during the presentation of the bank’s quarterly inflation report.
Romania’s annual inflation rate accelerated to 2.04% in June from an all-time low of 1.79% in May, ending a seven-month slowdown.
The central bank last week kept its key rate unchanged at 5.25%, in line with expectations, citing asymmetric risks to the inflation outlook amid adverse external developments and domestic political tensions.
The eastern European country is mired into a deep political crisis, following two government collapses earlier this year and a recent fight for power between the current ruling coalition and President Traian Basescu. The latter apparently survived a referendum on his impeachment, but the supreme court must certify the results before he can resume his position.
Meanwhile, the leu has taken a hard hit and has fallen to record lows against both the euro and the US dollar. Friday, the central bank announced an exchange rate of 4.6481 to the euro, the weakest rate on record. Against the dollar, the leu’s indicative lost 1.2% on the day to 3.7972 units