Romania: From the quantitative monetary aggregates to inflation targeting

Ionut Cristian Voicu and Floricel Constantin

MPRA Paper from University Library of Munich, Germany

Abstract: For Romania, the shift from monetary targeting toward inflation targeting was done under the influences of following events: - The existing pressure coming from refinancing the public debt and from the necessity to remain in certain boundary with the budgetary deficit. - NBR assigned monetary control and liquidity management functions on the mechanism of minimum required reserves. - Romanian strategy was deeply hurt by the low development of its financial markets, and the low level of monetization. - A precondition of potential success in the case of inflation targeting was fulfilled - the improvement of taxes collection and the reduction of money laundry. - The important amounts of quantitative increases in Foreign Direct Investment (yearly Euro 4 billion), and also in the rest of M2’s components, forced the necessity of a new strategy based mainly on non-monetary aggregates

Keywords: monetary policy; inflation targeting; Romania; monetary aggregates (search for similar items in EconPapers)
JEL-codes: E58 (search for similar items in EconPapers)
Date: 2006-06, Revised 2006-09
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:396

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