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June 23, 2021

PSD: If there are no natural causes, then EUR appreciation can only be artificial; What is the BNR doing?

The Social Democrats claimed on Monday, in a Facebook posting, that “if there are no natural causes then the appreciation of the euro can only be artificial.” PSD reiterates the idea of BNR intervening to ensure the stability of the exchange rate.

“If there are no natural causes, then the appreciation of the euro can only be artificial. If foreign investments have grown and have brought more euro into the country, if more European grants have been absorbed, bringing more euro to Romania, if fewer Romanians have left the country and have taken out fewer euro, if imports did not grow and there was no need for more foreign currency… if all around Romania the euro is depreciating… then the rise of the euro is artificial! What is the BNR – which has the obligation to monitor the banking system and to ensure the stability of the exchange rate – doing?” PSD’s representatives wrote on the party’s official Facebook page on Monday.

PSD asked the National Bank of Romania to do its duty and defend the national currency last Friday too, stating that the BNR has enough resources to do so.

“In 2016, BNR Governor Mugur Isarescu was saying that ‘BNR defends the national currency, ensures the stability of prices (…) and the 3-4 million Romanians who have bank loans.’ Today, the BNR has reserves in excess of 36.8 billion, more than double the cash that moves in Romania. Hence it has enough resources to defend the national currency. Alongside the millions of Romanians who have to pay off their bank loans, we ask the BNR to do its duty!” the Social Democrats state.

On Thursday evening, the PSD pointed out that the National Bank is the only institution empowered to administered, in a “controlled” fashion, the RON/EUR exchange rate.

A single intervention on the foreign exchange market, meant to appreciate the RON in relation to the EUR, would result in the pointless loss of forex reserves, and selling just one part of this reserve would push the interest rates upwards, National Bank of Romania (BNR) Spokesman Dan Suciu explained on Sunday. He underscored that on Friday the Finance Ministry removed some of the RON from the market, through a common tax collection operation, a move that is already pushing the ROBOR toward 3.5 percent on all maturities.

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