Business News

Romania hikes key rate to fight inflation

Jul 31, 2008, 14:01 GMT

Bucharest - Romania's central bank raised its key interest rate Thursday for the sixth time this year in a bid to fight inflation that is among the European Union's highest. The quarter-point hike pushed the monetary policy rate to 10.25 per cent, keeping the cost of borrowing at a three-year high after consumer prices rose 8.6 per cent in June. Prime Minister Calin Popescu-Tariceanu's government, which faces November parliamentary elections, recently pushed through increases in retirement benefits and the minimum wage - moves that will increase inflationary pressure, local analysts said. Curbing inflation is a key requirement for Romania to switch its currency to the euro, a goal the government has set for 2014. A restrictive monetary policy remains necessary under current economic conditions, the central bank said in a statement on Thursday's rate hike. Among the 27 EU members, only the three Baltic nations and Bulgaria have higher inflation, according to EU data.

Business News

Romania hikes key rate to fight inflation

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