NBR builds foreign currency reserve

Foreign currency is still flowing on the interbanking market, allowing the National Bank of Romania (NBR) to keep on buying dollars, as it has been doing over the past months. In April, NBR hard currency reserve increased to 2.887 billion dollars, up 63.7 million dollars against March. NBR hard currency reserve has gained 391 million dollars since the beginning of the year.

Dealers feel that the hard currency reserve is likely to maintain the increasing trend over the next period of time, because, on one hand, “the market (the banks and the clients, i.e.) is a net seller of hard currency,” and, on the other, the exchange rate seems to be stable. Authorities have targeted 3.5 billion dollars in foreign reserves this year.

“The hard currency reserve of the central bank will go up every month, as no pressures on the exchange rate are expected. The daily value of transactions on the foreign exchange market is around 30-40 million dollars and, if some troubles occur, the central bank may solve them by supplying the market with about 5 million dollars,” Sorin Udriste, senior dealer with Bank Austria Creditanstalt Romania, said.

“The surplus of dollars on the market will also go to NBR reserve, only to be joined by other net foreign currency inflows,” he added

“I expect the foreign reserve to stand at about 3-3.3 billion dollars by the end of the year,” Udriste specified.

April’s 63.7 million-dollar increase was mainly due to the 128.9 million dollars purchased by NBR from the foreign exchange market. Another 22.0 million dollars came from managing the international reserve.

Last month, NBR paid 64 million dollars as interest rates and dues for the foreign public direct debts guaranteed by the Finance Ministry and 46.3 million dollars to redeem the hard-currency denominated state bonds issued by the Finance Ministry on the domestic market.

The gold reserve maintained at 105,0 tonnes, but, given the evolution of the gold price on the international market, its value increased to 889.4 million dollars, allowing NBR total reserves (hard currency and gold) to exceed 3.7 billion dollars.