Isarescu: A smart guy would buy dollars now

The gain of the single European currency against the dollar is not making any inflationary impact on Romania yet, as it is balanced by the decline in the oil prices. It could, however, cause trouble, if moving beyond the 1.15 dollar threshold, the National Bank of Romania (NBR) Governor Mugur Isarescu said on Wednesday.
The single European currency has been gaining a lot of ground against the dollar on the international markets over the last few days, peaking at 1.14 dollars/euro, the highest exchange rate since January 1999.
In Bucharest, the euro went up again and reached 37,558 ROL on Wednesday. It has actually gained 7.6% against the ROL since early this year. Also on Wednesday, the dollar fell from the 33,037 ROL on Tuesday to 32,933 ROL.  The dollar has remained at about the same level for a year now. Supply and demand for euros on the Bucharest market has been rather unbalanced lately, with millions of euros in deficit registered every day. At a first glance, NBR appears not to have been very active in covering the foreign currency deficit on the market.
Isarescu admitted that the Romanian interbank market was facing a serious foreign currency shortage, but did not go into details as to what might have caused it.
“As a general formula, and not very explicitly, one can see we have a weaker capital account than last year,” the NBR governor said.
He feels the psychological component derived from the euro increase will make little impact on inflation.
“There’s a flocking trend on the foreign currency markets, which can be explained, and everybody’s buying euros. A smart guy would go for dollars now. At any rate, not selling foreign currency does not necessarily mean we are not intervening on the market. We can do it by a more aggressive purging, without the banks even noticing it,” Isarescu said. razvan.voican@zf.ro