CIPRIAN-IONEL TURTUREAN An. Inst. cerc. ec. „Gh. Zane”, t. 18, Iaşi, 2009, p. 135-140 REFERENCE RATE’S INFLUENCE ON ROMANIAN INFLATION RATE, DURING THE 1997-2007 PERIOD 1. Introduction Inflation, as an expression of market’s monetary glut in relation to the goods and services produced by a state at a certain moment can be controlled, within certain limitations, by exerting monetary policies that implies the intervention of the national bank over the reference rate. The interest is an expression of money value on a certain financial market and is the result of the offer and demand of liquidity on the monetary market. This can constitute as a simulation instrument of the existing liquidities on a certain monetary market at a certain point. The interest can encourage temporary change of money destination through the final consumption, investment or saving. The saving and the investments are the equivalent, most of the times, in a healthy economy, of redirecting a part of the financial resources designated for the final consumption to investment through the banks or through the investment companies. Most of the times, the saving is equivalent to long or medium term investment, which implies making surplus value. The link between the owners and the demanders of financial resources is the banks and the investment companies. Considering this mechanism, the NBR uses the reference rate as an instrument for targeting inflation. The healthier is the banking system, the more efficient is the instrument. A banking system is considered to be healthy if the banks that constitute the system have, as a primary income source, the profit made from economic investments and not from reselling money to the population through crediting operations. 2. The aim of the research and the used methodology The aim of this research is to estimate the econometric relation between the Romanian reference rate and inflation rate, for the 1997-2007 period.