NBR's reserve up to 8 billion euros in October

The over 185 million euros bought from the forex market along with the 135 million euros that came in form of the last two tranches of the stand-by credit from the IMF pushed National Bank of Romania’s (NBR) international reserves to a record level of more than 8 billion euros at the end of October.

The foreign currency reserves reached about 6.9bn euros, up 227.3 million euros from the end of September, as promised by the central bank to the IMF. The Fund experts felt the reserves had to keep being increased in response to the quick import growth, which had resulted in a deterioration of the import coverage in the foreign currency reserve to 3.7 months this summer. The coverage had gone back to 4.3 months of imports by the end of September.

The reserve increase occurred amid 190 million euro payments the NBR had to make on instalments and interests for the direct public foreign debt secured by the Finance Ministry. The repurchase of an eurobond issue worth 150 million euros released in 2000 accounted for the largest share in the total payments, but was largely compensated for by the collection of the IMF tranches. The aggressive position of the central bank on the forex market reflected by the over 185 million euro buys offset the impact of the 208 million euro total payments, which included redemption of T-bills in foreign currency issued by the Finance Ministry on the domestic market and worth 18 million euros.

The management of the international reserve yielded another 11.1 million euros, in addition to new net inflows of nearly 104 million euros, derived from the modification of the minimal foreign currency reserve requirements for the commercial banks, from transfers to the State’s foreign currency reserve, banking fees etc.

The reserve had gone up only 10.5 million euros in September, compared with 367.8 million euros in August, reaching 6.672bn euros. razvan.voican@zf.ro