The National Bank is ready to sell up to 300 million euros on the forex market by yearend, to put a lid on the potential speculative surges of the ROL exchange rate. The first move was made on Friday, when NBR sold 50 million euros to push the single European currency back under the 40,000 ROL threshold, which it had exceeded at the banks.
“The ROL’s real depreciation has now reached the right level, namely 2%. We cannot afford more because of the risks related to the foreign payment balance and the financial indiscipline,” said NBR Governor Mugur Isarescu.
The central bank is also planning a new raise of the intervention rate, although it admits it would have been better to send it on a gradual decrease, without any raises that may fuel insecurity.
The National Bank is not willing to resort to exchange rate corrections to stop the current account deficit’s growth, but is determined to make its presence felt on the market, in order to put a damper on the speculative transactions that can interfere with its projections on the ROL appreciation/depreciation. The currency reserve has climbed to 6.9bn euros and will allow the central bank to take a strong position on the forex market.
The National Bank is still monitoring the ROL’s position against a currency basket (60%-euro and 40%-US dollar). However Governor Mugur Isarescu says the ratio will change next year, when the euro’s weight will reach 70%, to better mirror the share of the single European currency in Romania’s trade.
Although it has been registering an appreciation against the currency basket in its current structure, the ROL is actually losing ground in real terms against the euro, which can induce inflationist effects. As the EU accession date (set for 2007) draws near, the euro will come to account for 80% of the currency basket in 2005, and 100% in 2007.
razvan.voican@zf.ro