Two Foreign Bks Take Out EUR2B From Romania On Scarce FX Facilities - Sources

Two international lenders have temporarily withdrawn EUR2 billion in capital from the Romanian market recently, because they were unable to invest in short-term foreign currency facilities, people from the central bank told MEDIAFAX.

"The parent banks didn't lower their exposure to Romania, but they lack instruments to invest in on short-term," said the sources, who declined to name the banks that withdrew capital from the local market.

Romania's central bank on Monday lowered the minimum reserve requirements on foreign currency-denominated liabilities to 25% from 30%, to support the budget deficit financing, on delays of the external loan disbursements.

"The central bank has freed some EUR1.3 billion following the move, and the money will most likely be used for state treasuries in euros," the quoted sources said.

They added the two parent banks would probably send back the EUR2 billion withdrawn if the Finance Ministry will borrow hard currency.

Early November, the ministry sold at auction EUR793.8 million of three-year euro-denominated treasury bonds, double the planned amount, at a 5.25% annual yield.

The parent banks of top nine Romanian lenders agreed earlier this year to keep their exposure ceiling on the local market.

Representatives of the central bank, the International Monetary Fund and the European Commission will meet Wednesday in Brussels the heads of the nine parent banks to review the commitments assumed by lenders.

mediafax.ro