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May 22, 2022

RON appreciation sets BNR against new speculative capitals

The National Bank of Romania (BNR) is once again confronted by a big dilemma, as banking interests yield gap once again lures speculative capitals in, especially given the latest appreciation of the RON. In a comment for Hotnews, former Finance minister Daniel Daianu explains that allowing the Leu to appreciate supposedly helps calming the inflation. On the other hand, net exports should not be hurt, as they are the main driver of the economy, as a healthy component of aggregate demand. In this context, the national currency kept its appreciation achieved at the beginning of yesterday’s trading session, while BNR announced a slightly lower reference exchange rate, of 4.1054 RON/EUR.

According to Daianu, the struggle for survival forced local companies to seek foreign markets outside the EU, sometimes even with losses. Furthermore, foreign companies tried to capitalise on the cost of Romanian labour. The former Finance minister added that the target of curbing the consolidated budget deficit at 4.4 pc of the GDP in 2011 is hampered by the fiscalisation of quasi-fiscal deficits that are the result of inefficiency and net losses sustained by state companies. In 2012, the deficit will have to be further curbed to about 3 pc of the GDP, while the fiscalisation of these (previously hidden) deficits will continue.

Another topic refers to the privatisation of the CEC Bank management. Daniel Daianu described as “impossible to understand” the intention of Finance Minister Gheorghe Ialomitianu to bring a foreign manager for the state bank, as the minister said Monday on TVR Info. First, though state-run, CEC is not a loss-making company. Second, with Gratian Ghetea in charge, despite the lack of experience of some Board members, CEC made progress and enforces a public policy of development. Thus, the only problem is represented by appointing the clientele in leading positions with the bank, claims Daianu. According to the financial expert, the new nomination proposals in CEC were made by the Ministry of Public Finance, hence by the Government itself.

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