The National Bank of Romania (NBR) had a rather rough November. The attempt to contain the ROL depreciation against the two benchmark currencies for the Romanian market, the euro and the dollar, cost it no less than 200-220 million euros. And things are not over yet, all the more so since the euro keeps gaining ground against the dollar on the foreign markets.
Although several months ago, the messages, either direct or indirect, of the bank's officials hinted that the central bank would be a net foreign currency buyer rather than a seller, November verified once more that things are not always going as planned.
Last month, the central bank intervened on the market no less than four times and sold significant amounts of euros in an attempt to reduce the depreciation of the domestic currency against the euro. And this was because the euro simply took off, leaving the dollar far behind and breaking record after record.
This is actually what has happened over the last few days, when the euro crossed the 1.2 dollar threshold and climbed to 1.2040 dollars yesterday.
The central bank on Friday performed one of its firmest interventions on the foreign market, selling more than 90 million euros to the banks in order to support the domestic currency and counteract the impact of the serious appreciation of the European currency on the international markets as best as it could.
NBR's intervention pushed rates down by 200 units, from the day's high of 40,380-40,410 ROL/EUR to 40,175-40,205 ROL/EUR.
The decision of the central bank to flood tens of millions of euros onto the market came at a time when the European currency had taken a strong upward trend, but the sale also covered significant deficits accumulated throughout the week.
"Had the NBR not sold euros, the exchange rate could have easily gone beyond 40,450-40,500 ROL, particularly since it has reached a new all time high and the banks needed foreign currency. I think the intervention came close to 85-90 million euros," a dealer commented.
The dealers expect the central bank to keep defending the domestic currency and avoid going above 40,300-40,400 ROL/EUR. A powerful euro is of no help to the inflation, particularly at the end of the year and does not "work for" those who have loans in foreign currency pending repayment. oana.nuta@zf.ro
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