The National Bank of Romania (NBR) bought 212.3 million euros from the foreign exchange market in January, and did so in such a manner that market players were left guessing as to the central bank's intentions.
The situation in January 2005 is the exact opposite of January 2004, when the NBR sold more than 127 million euros in order to contain the effects of the foreign currency shortage on the market.
This was no longer the case because foreign currency inflows showed once more that the patterns of recent years no longer hold true.
As a result of the move, the NBR's foreign currency reserves exceeded 11.2 billion euros at the end of January, representing an increase of 430 million euros on the previous month.
The reserves increased not only due to acquisitions on the market, but also due to the net inflows as a result of the modification of the minimal foreign currency reserves made by banks; foreign currency transfers to the state reserve; and payments in the form of banking fees - all of which totalled 212.2 million euros.
At the same time, NBR made payments of only 30.8 million euros representing repayments and interest on the foreign direct public debt secured by the Finance Ministry.
Foreign currency purchases went almost undetected on the market, as they were made at a time of substantial foreign currency surpluses resulting from dealings with clients. At the time, dealers were in doubt as to whether the central bank was behind the purchases that kept the exchange rate up. At any rate, this policy contradicts previous statements on the transparency of the open-market operations of the central bank.
liviu.chiru@zf.ro ; razvan.voican@zf.ro
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