Challenges of the National Bank of Romania’s Monetary Policy on the Road to the Euro Area

Damian Monica ()
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Damian Monica: „Ovidius? University of Constan?a, Faculty of Economic Sciences

Ovidius University Annals, Economic Sciences Series, 2013, vol. XIII, issue 1, 184-189

Abstract: Romania’s accession to the European Union implies adopting the euro currency, which is conditioned by the participation in the Exchange Rate Mechanism II (ERM II) for at least two years. The participation in the ERM II has implications upon the monetary policy: on the one hand, the exchange rate variation must fit the ± 15% fluctuation band around the central parity, while on the other hand, the fulfilment of the inflation criteria is necessary. The first part of the paper focuses on the challenges of the National Bank of Romania’s monetary policy which issue from the Maastricht convergence criteria. In the second part of the paper we highlighted the necessity of coordination of monetary and fiscal policy in the ERM II period, being essential for achieving inflation criteria and government deficit criteria. The fiscal policy must strive, simultaneously, the budget deficit and inflation decrease.

Keywords: Exchange Rate Mechanism II; convergence criteria; monetary policy (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xii:y:2012:i:1:p:184-189

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