A BRIEF EVALUATION OF INFLATION TARGETING IN ROMANIA ENVISAGING THE EURO ADOPTION

This paper aims to present a clear, pertinent and realistic description of the actual results and perspectives of the application of inflation targeting in Romania, in the context of two major events – the financial crises and the Euro adoption process. The paper is structured based on the following elements: - the implementation of the inflation targeting monetary strategy – arguments, advantages, technical elements; -the institutional changes; - the decisional and operational framework of the monetary policy; - a brief assessments of the results of implementing the new monetary policy strategy – inflation targeting.monetary policy, inflation targeting euro, monetary convergence

Romania s European Monetary Integration - Actual Status, Costs and Benefits

For Romania, the EU accession and the European symbols – such as the EURO currency – represent both the integration into a strong and efficient economic system, but also the guarantee for real democratic values. Romania has expressed a real and strong attachment for the European Union, its symbols and values. The focus of this paper is directed towards the actual economic and monetary situation in Romania, on its way to the single European currency. Economic conditions have generally improved, but some problems still persist. Reality is now different considering the inflation growth and the important deviation from the target, and recently, the exchange rate fluctuation and the national currency devaluation. Romania has had a unfavourable history concerning inflation and even exchange rate matters. The situation is unfortunately not yet stabile, inflation is still an important issue, the exchange rate is still fluctuant, and the National Bank of Romania is still confronted with the situation of having to deal with monetary problems, but which in fact have an economic and productive explanation and cause. Finally benefits and costs of the EMU accession for Romania are sinthetized and explained according to the previous description of the economic and monetary situationRomania, inflation, monetary integration, EURO

Forecasting inflation and its determinants

VAR modeling in inflation forecasting has been widely used, and rather successful, even if there have been several critiques of its exactness or accuracy. This paper is structured into two sections. The first one accomplishes a general presentation of VAR modeling in forecasting inflation, and the second is focused on the results of this econometric approach for inflation in Romania. Even if we considered methodologies containing inflation measured using CPI, CORE1 and CORE2, testing will only be performed for the CPI Inflation. Data used in mainly provided by statistics issued by the Romanian National Bank, and computing is accomplished using Mathematica 5.0.inflation, VAR models, forecast, Romania

COMPETITIVENESS AND MONETARY MANAGEMENT IN ROMANIA – A CRISIS OVERVIEW

This paper aims to briefly present the effects of the financial and economic crisis in Romania in respect of the monetary developments and their impact on competitiveness, on firms involved in foreign trade on international market. All the analysis is undertaken in the general framework of the monetary integration process envisaging the Euro adoption, and in the context of actions of the Romanian National Bank as part of the foreign exchange and monetary policy strategy. Due to constant preoccupation from the most important monetary institution, the Romanian Leu has performed rather well compared to rest of the macroeconomic picture and seems to drag forward the whole set of other indicators, including economic aspects such as competitiveness. The connection between the foreign exchange rate and competitiveness can be best depicted in the effects on exporting firms.exchange rate, competitiveness, monetary integration

ROMANIA AND THE EURO. A RELATIVE POSITIONING AMONG THE CANDIDATES

For most Eastern European countries that experienced former communist regimes, the EU accession and the use of European symbols – such as the EURO currency – represents both the integration into a strong and efficient economic system, but also the guarantee of a system based on real democratic values. Romania has been the first of this category of states, that has expressed the real and strong attachment for the European Union, its symbols and values. This paper wishes to analyze the key elements concerning Romania’s accession to the EMU and finally the EURO adoption: Romania’s actual macroeconomic situation, the situation of the real and nominal convergence to the accession criteria – in a fuzzy clustering approach in order to determine optimum sequencing of the Euro adoption and the envisaged official calendar for the EURO adoption

The country risk for Romania

The administration of a financial activities portfolio usually generates two categories of risks: the risk exposure and the market risk. The purpose is to present the evolution of the country risk of Romania through using the specific statistic indicators with the granted classification by the main rating agencies. The risk exposure is the result of credit activity to a public debtor (in this case, a country), this activity being applied by banks at international level. From this point of view, the analysis of the country risk must offer information on the base of which the banks can establish the upper limits of exposure to a country and can monitories as possible in real time, the exposure to the respective country. The market risk appears as a result of unfavorable changes that may appear in a country’s financial market and that may affect the performance of activities that compose the portfolio of a bank, which has an exposure in relations with the respective country. In the literature approaching the country risk, the market risk is as inexistent or it is treated with superficiality, although it constitutes a fundamental component of the banking risk, concerning the development of the activities that unfold on these markets. From this perspective the approach of the country risk is insufficient and the developed methodologies must be extended through including this last aspect. But this paper does not purpose to introduce new components in the methodologies of analysis concerning the country risk and the market risk. The administration of a financial activities portfolio usually generates two categories of risks: the risk exposure and the market risk. The purpose is to present the evolution of the country risk of Romania through using the specific statistic indicators with the granted classification by the main rating agencies. The paper has three principal parts - the first tries to familiarize the reader with the definitions and the fundamentals of the country risk analysis, the second presents the statistic indicators and methods used in the assessment of the country risk and the third focuses on the Romanian case

ROMANIA AND THE EURO. A RELATIVE POSITIONING AMONG THE CANDIDATES

For most Eastern European countries that experienced former communist regimes, the EU accession and the use of European symbols – such as the EURO currency – represents both the integration into a strong and efficient economic system, but also the guarantee of a system based on real democratic values. Romania has been the first of this category of states, that has expressed the real and strong attachment for the European Union, its symbols and values. This paper wishes to analyze the key elements concerning Romania’s accession to the EMU and finally the EURO adoption: Romania’s actual macroeconomic situation, the situation of the real and nominal convergence to the accession criteria – in a fuzzy clustering approach in order to determine optimum sequencing of the Euro adoption and the envisaged official calendar for the EURO adoption

The country risk for Romania

The administration of a financial activities portfolio usually generates two categories of risks: the risk exposure and the market risk. The purpose is to present the evolution of the country risk of Romania through using the specific statistic indicators with the granted classification by the main rating agencies. The risk exposure is the result of credit activity to a public debtor (in this case, a country), this activity being applied by banks at international level. From this point of view, the analysis of the country risk must offer information on the base of which the banks can establish the upper limits of exposure to a country and can monitories as possible in real time, the exposure to the respective country. The market risk appears as a result of unfavorable changes that may appear in a country’s financial market and that may affect the performance of activities that compose the portfolio of a bank, which has an exposure in relations with the respective country. In the literature approaching the country risk, the market risk is as inexistent or it is treated with superficiality, although it constitutes a fundamental component of the banking risk, concerning the development of the activities that unfold on these markets. From this perspective the approach of the country risk is insufficient and the developed methodologies must be extended through including this last aspect. But this paper does not purpose to introduce new components in the methodologies of analysis concerning the country risk and the market risk. The administration of a financial activities portfolio usually generates two categories of risks: the risk exposure and the market risk. The purpose is to present the evolution of the country risk of Romania through using the specific statistic indicators with the granted classification by the main rating agencies. The paper has three principal parts - the first tries to familiarize the reader with the definitions and the fundamentals of the country risk analysis, the second presents the statistic indicators and methods used in the assessment of the country risk and the third focuses on the Romanian case