The Relationship between the EUR/RON Exchange Rate and The Romanian Inflation

Catalina Adriana Handoreanu
European Research Studies Journal, Volume XI, Issue 4, 71-82, 2008
EOI: 10.11214/thalassinos.11.03.008

Abstract:

Using monthly data from January 2000 to October 2007, the present working paper analyses the degree of exchange rate pass through into inflation in the case of Romania. The econometrical method used is the recursive VAR that suggested a low level of the influence of the exchange rate on inflation. Despite the historical role of the exchange rate on the macroeconomical adjustment, this finding is consistent with the inflation targeting regime adopted by National Bank of Romania.


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