BNR covers foreign financing deficit from mandatory reserve

The National Bank of Romania (BNR) decided on Monday to release money from the mandatory reserve set up by the commercial banks in order to cover the foreign financing deficit, central bank officials announced.

'The National Bank's Administration Council met in a special sitting in order to examine the consequences on the budget, money and finances incurred by the postponement of the foreign loans set for the 4th quarter of this year within the multilateral arrangement made by Romania with the European Union, the International Monetary Fund and other international financial institutions. Amid the delayed scheduled receipts of outer funds, the covering from the domestic market resources of the financing required by the governmental sector in the last part of this year coupled with keeping the macroeconomic balances calls for appropriate financing conditions from the domestic banking system', the BNR said in a release.

As a result of such a situation, the release says, 'the BNR Administration Council decided to cut the crediting institutions' minimum mandatory reserve rate applicable to the forex liabilities with below-two-years residual maturity to 25 percent from the current 30 percent to be enforced starting Nov. 24 - Dec. 23, 2009'.

The decision made by the central bank's Administration Council is also in line with a process on the gradual alignment of the level of the Romanian minimum mandatory reserve rate with the European Central Bank standards.

Agerpres