Exchange Rate and Economic Growth. The Case of Romania

Artikel

Considering the difficulties created by the economic crisis, many exporters have criticized the National Bank of Romania (NBR)’s policy regarding the exchange rate evolution. They argue that depreciation is a necessary condition for recovery and not financial stability. On the contrary, Romania cannot afford a shock in the exchange rate level. The risk associated with such a measure is too high for an emerging country and it annihilates any export competitive advantages. Therefore, depreciation may delay the imperative of Romanian economic recovery. A solid economic recovery should have as starting point a financial system sound and stable. Excessive exchange rate depreciation jeopardizes the financial soundness of banks and the borrower’s ability to repay their loans. Therefore, it creates inflationary flare-ups, particularly dangerous for the economy of any state.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: CES Working Papers ; ISSN: 2067-7693 ; Volume: 2 ; Year: 2010 ; Issue: 4 ; Pages: 73-77 ; Iasi: Alexandru Ioan Cuza University of Iasi, Centre for European Studies

Classification and Topics

• Classification: Wirtschaft
• Subject: exchange rate ; economic growth ; Romania ; euro ; leu ; depreciation ; appreciation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ghiba, Nicolae
• Event: Veröffentlichung
• (who): Alexandru Ioan Cuza University of Iasi, Centre for European Studies
• (where): Iasi
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/198093
• Last update: 10.03.0003, 12:45 AM CET