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Popa (BNR): The inflationary shock comes from the shock of energy markets

The inflationary shock comes from the shock of the energy markets, and monetary policy is not the answer to any problem of society, says Cristian Popa, Member of the Board of Directors of the national Bank of Romania (BNR).


The backdrop of overly stimulating monetary and fiscal policies in the pandemic, on which this shock arose, along with problems in supply chains and war, certainly favored the rapid transmission of high energy prices to the rest of the prices, mainly those of food, but not only. This is why almost all central banks in the world are strengthening monetary policies. But just as money is not the answer to all problems in life, so monetary policy is not the answer to every problem of society. We have not yet received a concrete explanation how through interest rates we can solve the supply chain blockage, the energy crisis or the microchip crisis,” Cristian Popa wrote on Facebook.

He mentioned that BNR, through the instruments at disposal, act on principle on the part of demand, the only solution being the increase of interest.


I said it on different occasions, inflation is a symptom of the issues in economy, of imbalances and shocks, but his symptom may become an illness if it is not treated properly. The National Bank of Romania has been treating  this symptom with several instruments, for over a year, with a very well calibrated dosage. It will follow the same road’ the BNR official said.