BUCHAREST: Romania's central bank board unanimously voted to hike its benchmark interest rate by a quarter point to 2 percent for the first time in a decade at its Jan. 8 meeting, it said in its minutes released on Monday.
The decision, which made Romania the second among European Union's central and eastern stated to start tightening from record low levels, after the Czech Republic, was aimed at curbing inflationary expectations.
"Some board members referred to the transitory nature of the inflation bout that would probably be manifest in the first quarters of 2018, given the foreseeable fadeout towards the end of this year of the effects exerted by many of the supply-side inflationary shocks," the minutes showed.
"At the same time, however, concern was voiced about the risk that, owing to mounting pressures from excess aggregate demand, the anticipated heightening of the impact of supply-side shocks might de-anchor inflation expectations over the longer time horizon."
Further supporting the hikes were expansionary fiscal and income policies, the bank added.
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