The “naked” FED calls it ALL IN

Most central banks adopted Inflation Targeting when inflation was a real problem. The purpose of such a regime is to increase credibility, accountability and transparency for monetary policy and to permanently bring inflation to a pre-agreed target. The Fed decided to adopt such a regime at a time when inflation is not really a problem. Why would it do that?
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Should we save the RON?

In my last post I was arguing mostly from a theoretical point of view that Inflation Targeting has failed in Romania. To be fair it was never been given a fair chance. Two years into implementing the regime the NBR decided not target inflation but the exchange rate .  One perverse result from this in an economy with historically high inflation and no growth is dominance of local currency by ones from countries with economic growth and low inflation. In other words the central bank has implicitly subsidized the dominance of EUR by undermining RON.
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