Isarescu: Romania is far from "hard landing"

Romania does not run the same dangers like Lithuania, Latvia, Estonia and Bulgaria - a group considered by the foreign analysts doomed to a "hard landing," BNR Governor declared in an interview to Mediafax. "Reading the texts of the respective foreign analysts, I found with difficulty a solid argument meant to justify the inclusion of Romania in the hard landing risk area. On the contrary," he said.

On the other hand Isarescu says 2014 remains the target for Romania in order to join the Euro-zone.

According to Isarescu there are certain similarities between these countries, such as GDP level per capita, lower than the EU average, and the fact that all of them have registered high growth levels in the process of filling up the gaps. In our country, Isarescu added, the foreign exchange regime based on a flexible rate allowed the market to repair through its own mechanisms the over-appreciation registered by the RON at a certain moment, while the National Bank could increase the interest rates, which it has done, in seven rounds in the last ten months. Moreover, the National Bank went even farther in order to appease consumption and maintain the health of the portfolio of the commercial banks, through the recent prudential measures connected with the credits for natural persons, the Governor of the Central Bank stressed.

The purpose of these actions was to limit the risk of a hard landing of the Romanian economy, even if it is still present, as long as an important gap remains between the current account deficit and its funding through entries of foreign direct investments.

Romania is penalized by the foreign analysts also because of the indicator called "foreign liquidity" - an indicator which reflects the ratio between the international reserve of the country and the foreign debt, public and private, in the short run. A ratio below the units in the case of Romania, the short term foreign debt being bigger than the reserve.

But, according to the Governor, these ratios are exaggerated because the international reserve of Romania is at the upper limit of the optimum ratio if it is evaluated according to the other indicators, such as the reserve to imports ratio.

Nine O'Clock