If the exchange rate had gone crazy, the only impact would have been higher inflation, declared on Wednesday, the governor of the National Bank of Romania, Mugur Isarescu, noting that the theory is applied with great care, told Agerpres.
"For now, if the exchange rate had gone crazy, the only impact, I think, can be discussed a lot on this topic, the only impact would have been only in higher inflation, the necessary corrections would not have been made. It was not the moment, with the crisis in eastern Romania, and major crisis, and with such a deterioration in the exchange rate, because all the prices of energy products exploded, it would not have been the time to make a correction through the exchange rate. It must be gradually absorbed, let the shock pass and then let's see to what extent we can absorb, including through the movement of the exchange rate," said Mugur Isarescu.
He gave as an example the situation in Hungary where things got a little out of control, there is a massive deterioration of the HUF and a much higher inflation, 26%.
"The theory is applied very carefully. That is, the depreciation of the exchange rate corrects the trade deficit and the balance of payments in certain situations. In other situations it creates a vicious circle and I think we did well not to let the exchange rate depreciate in this period. The capital inflows also helped, it's true. You saw the balance in the end, our reserve increased by a good few billion euros. We didn't have a deterioration of the reserves," said Mugur Isarescu.
He also mentioned that there is an improvement in Romania's risk premium.
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