Inflation in Central, Eastern and South-Eastern Europe remains higher than in more advanced economies. This requires central banks in this region to maintain high interest rates for a longer period than eurozone countries. This view was expressed by Alfred Kammer, a senior official at the International Monetary Fund (IMF). According to reuters.com, analysts expect the European Central Bank to start cutting interest rates in June.
As a result of softening inflation, central banks in Hungary, Poland and the Czech Republic have already started cutting interest rates. However, Romania, where inflation remains high, has postponed the move. The inflation situation is also slowly improving in Moldova, Romania, Montenegro, Hungary and Serbia. The IMF estimates that confidence in emerging European economies, including Romania, has suffered over the past three years, partly due to political interference with central banks.
In February 2024, the National Bank of Moldova lowered the benchmark interest rate from 4.75% to 4.25% per annum, as part of its main short-term monetary policy operations.
