Isarescu also said that emergency decree 114/2018, which introduces new taxes that impact several sectors of activity, has also caused problems for the local economy, not only for banks.
“Hardly had uncertainties in the economy tempered when they grew again in January, of course, with respect to Ordinance 114. This has implications on the exchange rate, interest rates and the country’s credibility”, Isarescu pointed out.
Central bank governor also spoke about the prolonged decline in investments that can no longer be denied.
Earlier Monday, Romania’s central bank has raised its year-end inflation forecast for 2019 to 3% from a previous forecast of 2.9%. It also lowered its 2020 inflation forecast to 3.1% from a previous forecast of 3.2%.
Romania’s Fiscal Council recently warned the swift adoption of new taxes with a negative impact on the country’s economy through emergency decree 114/2018, such as a tax on bank assets and additional taxation in the energy and telecom sectors, may amplify slowdown risks.
Fitch Ratings recently said it sees the operating environment for Romanian banks becoming increasingly difficult in light of a series of bank-unfriendly measures passed or proposed by the authorities. The potentially most severe is a bank levy linked to banks’ financial assets and the value of the interbank rate ROBOR, to which most retail loans are linked.