Inflation targets are formulated in terms of the annual change in the consumer price index and are set as midpoints within a target band of ±1 percentage points.

Similar to the experience of other central banks in the region which are implementing monetary policy in the context of inflation targeting, there are two distinct phases in the type and the levels of the inflation targets set by the NBR so far:

• the phase of declining inflation targets, set over a 2-year horizon as year-end annual rates (2005-2012), which is required primarily in order to consolidate the disinflation process and achieve a sustainable annual inflation rate in the medium term;
• the phase of a flat multi-annual inflation target, consistent with the medium-term price stability definition in the Romanian economy (starting 2013); this is an intermediate stage meant to ensure the transition towards the phase of long-term continuous inflation targeting – in line with the ECB’s quantitative definition of price stability.