Forex market shrinks to autumn 2007 level: under 30bn euros per month

The Bucharest forex market saw a little over 29 billion euros traded in April, the third month in a row that saw a decline in volume, according to data from the NBR (National Bank of Romania). This has been the first month since September 2007 when operations totalled less than 30 billion euros. Compared with April 2008, volumes on the forex market were almost 20% lower. The first four months of the year saw a little over 130 billion euros in cumulated transactions, 10% less than in the similar period of 2008. “Commercial operations went down, with both imports and exports shrinking. The very low volatility has additionally left very little room for profits,” says Ionut Dumitru, chief economist of Raiffeisen Bank. He adds that the decline in foreign currency lending has been felt in the volumes traded on the market, because many clients would convert the foreign currency secured through loans into RON. Whereas last year lending in foreign currency rose by a few hundreds of millions monthly, since the beginning of 2009, the volume has only recorded contractions, i.e. banks approved less financing than was paid back by clients.