The Monetary Policy Promoted by Romania’s Central Bank: Where To?

• Main Author: Tatiana (PAUN) ZAMFIROIU
• Format: Article
• Language: English
• Published: Universitaria Publishing House 2020-11-01
• Series: Finanţe: Provocările viitorului
• Subjects: monetary policy; financial stability; central bank; inflation; price stability
• Online Access: http://www.financejournal.ro/fisiere/revista/84822113308_Zamfiroiu_en.pdf

In Romania, the National Bank (BNR) is responsible for the monetary policy, and its objectives are harmonized with those set by the European Central Bank (ECB) in order to put in practice a correlation of the Romanian economy with that of the Eurozone, given the fact that 70% of Romania’s exports are made towards it. We should keep in mind that both BNR and ECB are aiming at assuring financial stability, and the fulfillment of this goal is only possible by correlating Romania’s monetary policy with those implemented by the central banks of the states in our region (Central and Eastern Europe). Romania is a direct competitor of Poland, Hungary or Czechia in terms of economic activity, and the monetary policy has to be correlated. These states had a similar course with that of our country, having had a centralized economy, and needed reforms similar to those implemented by Romania, and to compare them makes sense in most of the cases and in most of the economic sectors. It is unanimously accepted that the last decade’s events had a significant impact on the manner in which the classic monetary policy was realized, as well as on the way it was implemented, and these mutations will be taken into account and discussed in this paper. In the same time, we will separately take in consideration the various strategies the central banks can implement in order to assure financial stability and achieve monetary policy goals, irrespective of their nature. It is known that most of the central banks have a determinant role in assuring the financial stability of the states in which they are active. However, the manner in which they define and reach their objectives vary from case to case, and the focus of the present paper will be Romania, more precisely the case of the Romanian National Bank and its monetary policy over the last years.