Romanian MPC warns on inflation pressures

Having left interest rates unchanged earlier today, the Romanian MPC once again used the accompanying press conference to warn that looser fiscal policy could lead to stronger inflation pressures. But it’s clear that the Council will wait for more evidence before taking action. For our part, while we don’t think rate hikes are imminent, it does seem likely that Romania will tighten monetary policy earlier than the rest of the region. Elsewhere, Polish data (released today) that showed a steeper-than-expected drop in consumer prices this month reinforce our view that interest rates will stay low for longer than most expect.