BNR makes profit

The National Bank of Romania (BNR) paid in April, for the first time in the past nine years, tax profit, due to significant earnings in the past two quarters, which contributed to offsetting the loss carried forward from the previous time. "It is not only that BNR covered all the loss accumulated in the past years, but in April, after nine years, it is the first time when we paid tax on profit to the state budget. We have been making profit for some years, but with the profit registered we were covering the loss from the time period when BNR had to do mass sterilization," BNR Governor, Mugur Isarescu said in an interview for Mediafax.

Over 2001-2006, BNR registered loss, and until 2004 inclusively, the loss was covered from net earnings resulting from the reassessing of assets and liabilities in foreign currency. The profit for 2007 was used to cover the loss of the previous years. "As of last autumn, the fourth and the first quarters of this year, the profits were high. We expected to have taxable profit by end of 2009. The law does not allow us to pay tax on profit unless we were covering losses on previous years (…) A few quarters before, losses were covered, which was left from last years losses, and in April 2009, we paid tax on profit for the first time, since 2001. In Q 4 of 2008 and in Q1 of 2009 the profit is significant," the BNR Governor said. The bank is exempted from the payment of the profit tax, but according to the legislation, it transfers, to the state budget, a share of 80 per cent of the net revenues resulted after covering the expenditures of the fiscal year and the loss carried forward from the previous years, left unsettled from other sources.

The interes, follows a downward trend in line with the inflation

The monetary policy interest rate will decrease gradually, in line with the downward trend of the consumer prices, without sudden adjustments, as BNR Governor indicated. "A trend of the interest without sudden movements is preferable to one with sudden changes. At least, the data so far indicates that the interest trend is a downward one. I personally think that a trend of the interest rate in line with the inflation trend, thus, without sudden movements, is preferable to any other option…I do not see why sudden movements should be necessary because we do not face any major uncertainties as the price trends. It could be that for some foodstuffs, the dynamics of prices depends on drought also", Isarescu said. The monthly inflation reduced in April to 0.27 per cent, nearly half as against 0.5 per cent in March, and the annual rate dropped from 6.71 per cent to 6.45 per cent.

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