We risk going back to multiple currency exchange market, official says


The stock exchange should mature and “come out from under the empire of traders,” becoming an alternative to commercial bank financing, Central Bank Governor Mugur Isarescu added.

National Bank of Romania (BNR) Governor Mugur Isarescu warned yesterday that a new foreign currency exchange market would be needed and a return to a dual or triple exchange rate would be possible if the Central Bank does not sell on the market the currency attracted by the Public Finances Ministry through the issuance of bonds, he said at the conference titled “Creation of an international capital market in Romania,” a conference organized by BNR and attended by Premier Victor Ponta and Budget Minister Liviu Voinea.Let‘s read more information through the follow content.thanks for your patient reading,let us move on.
He gave as an example a “distinguished economy professor’s” comment on the Romanian foreign currency market. According to him, the National Bank should let the exchange rate free, determined solely by supply and demand, and should not intervene in the market, Mediafax informs. The Governor reminded that the Finance Ministry (MFP) borrowed USD 2 bln from the US market on January 15 in order to finance the budget deficit, “namely to cover through the exchange of USD into RON the expenditures that are higher than incomes and to sell that sum.” At the same time, he explained again that all of the MFP’s accounts are held at the National Bank, the latter issuing the currency and selling the sum on the market.
Referring to the Romanian capital market, he pointed out that the stock exchange has to mature after 20 years of existence, and “to come out from under the empire of traders, thus becoming an alternative to the commercial banks’ financing. The Governor opined that he prefers the stock market’s rapid evolution at this moment to its revolution or to a change “overnight,” especially since 2014 is an elections year and everything can be politicized.
“We have to also consider the fact that we are in an elections year, politicization is being done very quickly, from here on we need some patience and especially the capacity to explain again, again and again, countless times, the measures being discussed here. Of course there is the trend for them to be politicized and then all our efforts would be overturned,” Isarescu added. He encouraged the participants at the conference to have patience and explain how they believe things should be done in order for the Romanian Stock Exchange to go forward so that everyone would understand, without there being the risk he mentioned.
Daianu, ASF: We will make the capital market’s taxes and commissions “friendly”
The Financial Supervisory Authority (ASF) will take measures in order for the taxes and commissions applied on the capital market to become “friendly,” ASF First Vice President Daniel Daianu stated yesterday at the conference. The Authority is currently levying a 0.08 per cent commission applied to the value of purchasing transactions. Daianu also pointed out that the changes should be made in a rapid and “intelligent” manner. “We saw what happened at Harinvest, maybe also because of some people’s failure to understand the products. Simplicity is a virtue, everything that is too complex and complicated creates headaches. We need the reformation of supervision, not only are there weaknesses but Europe imposes it on you,” the ASF representative added.
Bucharest Stock Exchange (BVB) General Director Ludwik Sobolewski considers that measures that would lead to the creation of liquidity on the stock exchange would be necessary, considering that the capital market “is drying up, is almost dying, because it isn’t an attractive place and the economy’s big players prefer to finance themselves from outside the market.”

Non-residents’ direct investment, up 26.8 pc as compared with 2012

In 2013, the balance-of-payments current account posted a deficit of EUR 1,505 million as compared with EUR 5,843 million in 2012, due to the decrease in trade deficit (by EUR 3,956 million), as well as the increase in services surplus (by EUR 1,458 million1) and current transfers surplus (by EUR 287 million),  Also, non-residents’ direct investment in Romania  totalled EUR 2,713 million (up 26.8 per cent as compared with 2012), of which equity stakes consolidated with the estimated net loss amounted to EUR 1,776 million and intragroup loans to EUR 937 million. Medium- and long-term external debt at end-2013 stood at EUR 76,951 million (79.8 per cent of total external debt), 2.3 per cent below the level recorded at end-2012. Short-term external debt at end-2013 totalled EUR 19,491 million (20.2 per cent of total external debt), down 6.8 per cent from end-2012.

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