National Bank boosts forex reserve 6 times in 6 years

The foreign exchange reserve of the NBR (National Bank of Romania) has increased by almost 6-times over the last 6 years, reaching 25.3 billion euros at the end of December. Last year, the central bank increased its foreign currency reserves by 4 billion euros, a slightly lower increase than in 2006, when it stood at 4.5 billion euros. The peak was reached in 2005, when the NBR’s forex reserve climbed by as much as 5.95 billion euros. Last year, just as in 2005, the NBR had to buy massive amounts of foreign currency from the interbank market, in order to temper pressures for a fast appreciation of the RON in spring and summer. The deterioration of the foreign investors’ perception of the Romanian economy, however, led to a significant drop in the interest for placements in RON, which led analysts of local banks to suspect the NBR of intervening to stabilise the exchange rate in autumn, when the euro had climbed to 3.7 RON. Amid an uninterrupted increase in the NBR’s foreign currency reserve over the last six years, the growth rate slowed down to less than 19% last year, compared with 70% in 2004, even though the annual growth rate has remained above 4 billion euros during the last 4 years.