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October 25, 2021

ING: Support of RON decreased BNR’s FX reserves

The drop in Romanian National Bank’s (BNR) forex reserves may be due to the central bank’s interventions on the inter-bank market trying to prevent the local currency depreciation, ING Bank Chief Economist Nicolae Chidesciuc states in a reported cited by HotNews. He estimates that BNR may have pumped amounts from EUR 500 to EUR 1 bln in supporting the RON. ING analysts propose two possible scenarios with reads to the amount of euros BNR has traded. According to the first suggested scenario, BNR may have put on the market little over EUR 830 M, and, according to the latter, a slightly smaller amount of EUR 601 M. Chidescius shows the pressure the local currency was subject to was quite high, given the large volume of interventions, and that, currently there is excess cash on the market. BNR’s FX reserves at the end of May were at EUR 31.989 bln, RON 397 M less than at the end of April, according to central bank data. The decrease of forex reserves came from outflows (EUR 2.071 bln) outrunning inflows (EUR 1.674 bln).

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