Romania: Prudent central bank does the right thing
Today the Romanian central bank (NBR) responded to the recent weakening of the Romanian leu by hiking its key policy rate by 100bp to 9.0%. The hike was more aggressive than the consensus expectation and our expectation of a 50bp rate hike. That said, the hike is not overly surprising given the rising inflationary pressures at the NBR.
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Russia: Inflation concerns prompted monetary tightening
On Friday, the Russian central bank (CBR) decided to tighten up monetary conditions as a response to building inflationary pressures amid a period of rapidly rising domestic demand. The timing of the action comes as no big surprise, as the liquidity situation in the Russian money market in general has improved over the last couple of months, whereas inflationary pressures are still building.
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