The policies which the Government and the central bank are hoping will help scare inflation away, will be announced in full in a matter of days, Mugur Isarescu, National Bank of Romania Governor, stated.
"It is a matter of days before our anti-inflation policies will be presented in full. It is a well-balanced bundle, with clearly defined objectives, tools and responsibilities. It was discussed with the IMF delegation of course, and I can say there are some pretty harsh measures in it," Isarescu specified.
He says it is very important for people to know how inflation is supposed to be cornered. "We need a language that can be transmitted abroad, too, in order for us to be credible and fully understood," the NBR governor explains.
The head of the central bank also mentioned the surprise measures announced several weeks before. "We could try and take the markets by surprise, as well. The impact will depend on where the surprise comes from," Isarescu claimed.
He advocates a monetary policy "focused on its traditional function: to cut inflation." However, if the central bank's action is to be efficient, the problems related to the balance of payments and economic growth have to be approached in a different manner, according to Isarescu.
"We must not buy into the very dangerous illusion that whenever things do not work out as we want them to, we can fix it by means of exchange rate. We must say it out loud and clear: this is no cure, it is nothing more than a way out of dramatic situations," the NBR governor added.
In other words, the central bank wants to turn the exchange rate into the main anti-inflation anchor, particularly because its foreign reserve allows it to take a stronghold on the forex market.
It made just a small demonstration last Thursday, when NBR sold several million dollars, intimidating the dealers having displayed ever-increasing rates.
All in all, NBR wants the exchange rate to be more predictable.
Under the circumstances, Mugur Isarescu has requested the dealers in the commercial banks "more real forward rates, based on more technique and professionalism than in the famous Sibiu-based Exchange."
Misu Negritoiu, ING Bank deputy general manager, is sceptical regarding the efficiency of certain monetary measures in fighting inflation.
"In spite of NBR Governor's optimism, I do not think we are in the position to gradually curb the inflation by resorting to such measures, at least not until the price distortions in the real economy are eliminated," Misu Negritoiu told Ziarul Financiar.
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