Current way of injecting liquidity will not lower long term rates

NBR delivered another rate cut today from 5.75% to 5..5%. It is the third consecutive cut in the key rate and a good moment to see how has this easing cycle transferred into the real economy. The main question is if these rate cuts get to the real economy. As you will see not immediately and definitely not via lower interest rates.
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Romania 2012: Monetary Policy

Assessing Romanian monetary policy should be simple.  The Inflation Targeting regime should be transparent enough that based on current and forecasted inflation one should be able to guess the future path of the interest rates. In the end this is what matters for an economy: the future price of money/debt. Continue reading “Romania 2012: Monetary Policy”