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Romania’s central bank fights inflation

The Romanian central bank announced on Tuesday that it would raise its benchmark lending rate a full percentage point. This would cause the rate to hit 10%, and would keep the leu from dropping to 4 per euro. This rate increase makes the country the highest in the European Union.

The country does have benefits for property investors though. For one, the economy here continues to grow – with a 6.6% growth in the fourth quarter of 2007. This is the fastest expansion over 2006's final quarter. Household consumption is helping to drive these numbers.

Investors here are noticing the increase in property prices. They have risen by 25 to 30% annum for the past three years, in anticipation for the move to the European Union.

Investment in Romania, as well as other eastern European countries continues, as more investors become encouraged and confident in these market places. While other portions of the European Union continue to struggle with global economies, many of these areas are less affected by such changes, making them more accommodating and desirable to investors looking to avoid those struggles.

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