BUCHAREST, April 12 (Reuters) - Romania’s central bank board unanimously decided to hold interest rates at 1.75 percent at its April 5 meeting, it said in minutes of the session released on Wednesday, drawing attention to risks stemming from potential fiscal changes.
“In the short term, Romania would witness high economic growth, inflation under control, low unemployment, and financial stability,” the minutes showed. “Over the medium term though, there was uncertainty surrounding fiscal risks in particular amid the widening deficit during above-potential growth years.”
The bank also noted potential exchange rate risks stemming from fiscal and income policies, as well as developments in global and regional markets following monetary policy decisions.
The Social Democrat-led government will file a unified public sector wage bill in parliament this month, envisaging large pay increases across the board that will boost the budget shortfall. (Reporting by Luiza Ilie; Editing by Radu Marinas)