BNR: Romania’s Forex reserves down EUR 1.4 bn in October

It is the only major decline caused by the global crisis shocks, central bank governor’s adviser Vasilescu claims.

The foreign exchange reserves of the Romanian National Bank (BNR) in October lost EUR 1.43 bn, dropping to EUR 32.1, following exists of capital and trends in the exchange rate of EUR against other currencies, BNR informs. BNR governor’s adviser Adrian Vasilescu shares the opinion. As soon as the news had been out yesterday, he made a comment while avoiding to indicate if the central bank had also sold foreign exchange: ‘This decline follows an increase with EUR 876 M registered in September compared to August. So where is this variation coming from? It is a representative consequence of the global crisis, translated into the shock waves the crisis sent through to economic indicators in Romania. First of all, the crisis produced some notable fluctuations of at least three values in June: EUR/USD, EUR/JPY, EUR/CHF and EUR/GBP exchange rates, capital fluctuations in the region in general and in Romania in particular, with entries and exists marking major differences from one month to another and the often changes in the price of gold’, Vasilescu explained. Romania’s Forex reserves portfolio is calculated and totally expressed in euro, but the central banks divides it into euro, US dollars, Swiss francs and pounds sterling in different shares. Foreign exchange reserves in October went down by 4.24 per cent from EUR 33.63 bn at the end of September. Entries in October were EUR 383 M, resulting from the modification of the minimum requirements for lenders, feeing the accounts of the Ministry of Public Finance, revenue from the management of the international reserves and so forth.  At the same time, exists amounted to EUR 1.8 bn, representing the change in the banks’ minimum requirement, staged payments and interest on the public debt account in foreign exchange and payments on the account of the European Commission. The gold reserve stayed at 103.7 tons, with a value of EUR 4.09 bn. Romania’s international reserves (foreign exchange and gold) on October 31 were worth EUR 36.29 bn compared to EUR 37.64 end of September. Payments falling due in November on the account of the public debt in foreign exchange – direct or guaranteed by the Ministry of Public Finance amount to EUR 292 M.

On the other hand, the BNR official says October is a good mirror of what the effects of the crisis mean, even if steep changes in the FX reserves were also recorded in other months, when the causes were however related to the Finance Ministry’s loans or repayments. Vasilescu also pointed out that the evolution of gold price also influenced the trend of our international reserves considerably this year, with a positive contribution of over EUR 800 M from January till the end of October. ‘It is the only major decline caused by the global crisis shocks’, Vasilescu concluded.

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