The article explores how monetary policy decisions impact Romania's economy under an inflation targeting regime. The researchers used a method called vector autoregressive analysis to study the effects on GDP, price levels, M3 money supply, and exchange rates. The main findings show that when there is a monetary policy shock, consumer prices, GDP, and M3 money supply decrease, while the exchange rate increases. Short-term interest rate shocks have limited impact on consumer prices, production, and exchange rate fluctuations.