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NATIONAL BANK OF ROMANIA

Romania: Recent Macroeconomic & Banking System Developments Cristian Popa Deputy Governor. Athens, 16 October 2009. NATIONAL BANK OF ROMANIA. Current Account Deficit Financing via FDI. Timetable for Euro Adoption. Timing of ERM2 entry is planned for 2012 in order to:

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NATIONAL BANK OF ROMANIA

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  1. Romania: Recent Macroeconomic & Banking System Developments Cristian Popa Deputy Governor Athens, 16 October 2009 NATIONAL BANK OF ROMANIA

  2. Current Account Deficit Financing via FDI

  3. Timetable for Euro Adoption Timing of ERM2 entry is planned for 2012 in order to: provide some monetary and exchange rate flexibility (for a limited time period) in order to further necessary and substantial structural adjustment maintain motivation to carry out reforms in a timely manner and consolidate macro discipline provide the possibility of setting the central parity based on a more accurate estimate of the equilibrium exchange rate after overcoming the peak in capital inflows (expected to stay high even subsequent to EU accession) Timing configured to ensure ex ante likelihood of shorter necessary stay in ERM2 (min. 2 years), considering: credibility provided by final stage of the process (adoption of the euro) and attendant spurring of adjustment possible volatile capital movements amid restricted exchange rate flexibility during interim period the inflation targeting framework, to which exchange rate movements should be clearly subordinated Eurozone entry is planned for January 1, 2015 (euro adoption decision expected in 2014)

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