BNR intends to maintain exchange rate at last year’s level

BUCHAREST - National Bank of Romania (BNR) will maintain this year as well the evolution of the foreign exchange rate within a range of plus or minus 15 per cent, which provides financial stability, BNR Vice Governor Eugen Dijmarescu said end of last week by during a workshop addressing Romania’s EU accession impact on business environment.

“Last year, in spite of an impressive volume of speculative capital having entered the market, the evolution of the rate remained within a range of plus or minus 15 per cent. And this happened without BNR having intervened significantly in the market. We want to maintain the rate within this range also during this year, which means financial stability”, according to those told by Dijmarescu in answer to the complaints raised during the workshop by representatives of exporting companies in relation to the decrease in competitiveness and in turnover in 2006 because of the appreciation of national currency as against the European currency.

Yet, in 2006, RON registered an average appreciation by 2.72 per cent as against EUR and by 3.6 per cent as against USD, much below the advance calculated on the basis of the exchange rates at the end of the period. The exchange rates at the end of last year and in 2005 were indicating a nominal appreciation of RON by 8 per cent as against EUR and by 17.38 per cent as against the American currency.

Dijmarescu believes that foreign financial resources become increasingly interesting in the Romanian market, but he underlines that there is a fear related to the extent at which these flows are speculative or they are found in financing economy.

“Over the forthcoming period, we shall witness a major raise in the interest of foreign financial capital for Romania. The issue is whether these inflows have a speculative nature or they are found in the market”, according to those specified by the official of the central bank.

Based on estimations, the market experiences currently a shortage in terms of financial offers, which is worth EUR 12 bln., and which could be covered from internal resources. “In order to cover this shortage, there are funding sources in the internal market both in national currency, and in foreign currency.

The issue is whether one does not use the resources available in the market to the interest of local actors, they will be used by those who replace them”, according to Dijmarescu. In addition, he believes that the situation in the market becomes balanced both in terms of current account deficit, and in relation to the shortage of offers.

Over the first 11 months of last year, the balance of loans disbursed by banks to Romanian companies advanced by 36 per cent, up to the equivalent of RON 53.5 bln.

Based on the latest official figures registered at the end of the third quarter of 2006, the non-banking sector was posing an external debt amounting to EUR 10.5 bln., whereas foreign loans from foreign companies were amounting to EUR 6.2 bln.

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