“We are trying to resist and not reduce more the policy rate,” Isarescu told an investors’ forum organized by the Bucharest stock exchange in Bucharest.
Romania will have negative readings of the consumer price index over the next quarters, the governor said, but it won’t record deflation.
The central bank sees the inflation rate near zero for the next three to four quarters, following the government’s decision to cut the value added tax rate for all food products to 9% from 24% starting June 1. In May, it surprised markets with a 25-basis point rate cut to an all-time low of 1.75%.