Reserve still going up

The NBR announced the increase of the foreign currency reserve by 35.8m euros to 16.73bn euros in November. The expansion, although incomparably lower than the increases of more than one billion euros in midyear, comes at a time when markets were expecting a decline. The NBR redeemed the 300m-euro eurobond issue released by the Finance Ministry in 2000 that had fallen due last month, using funds from the reserve to do so, after the governor decided not to convey this additional demand for foreign currency to the market. Outflows from the reserve totalled more than 617 million euros in November. Governor Mugur Isarescu (photo) at the end of last month stated that he expected the foreign currency reserve to shrink by 400 million euros. Inflows, however, totalled 653 million euros in November, thus ensuring the continued growth. The central bank ceased publishing detailed information on the sources of such inflows early this year, and only mentioning “revenues from international reserve management, modification of the minimum mandatory foreign currency reserves of the commercial banks, transfers of foreign currency to the state reserve and others,” as being part of this category. Analysts say they were not expecting too see such a trend regarding the reserve, especially considering the governor”s estimates.