Romanians stand chances of not having to worry about taking their RON to Greece or Austria, that is those countries with many banks operating on the market in Bucharest, once the RON has become fully convertible.
"Slowly, banks will agree to exchange RON, as a result of bilateral conventions with Romanian banks and with travel agencies. The first to do it will probably be the banks in Greece and Austria, as well as in the countries in the region, such as Czech Republic and Hungary," Radu Ghetea, chairman of the Romanian Banking Association commented for ZF.
The fully convertible RON does not have any significant practical meaning to the public as long as banks and exchange offices abroad are in no rush to display quotes for the Romanian currency.
The areas in Europe where many Romanians live, such as Vienna, had exchange offices taking RON even before September 1, albeit the exchange rate was discouraging, some 5.1 RON/EUR, over 45% higher than the exchange rates in Bucharest. Possibilities to buy euros with RON are even more numerous in Budapest, because of the geographic proximity.
Last, but not least, cards issued in RON and useable abroad have been part of the banks' portfolios for quite a while.
Truth is that neither the Polish zloty, fully convertible since 1995, nor the Hungarian forint, fully convertible since 2001, are accepted by every bank, not even in the European Union.
September 14 will be the first day when foreign investors will be able to invest in Romanian short-term monetary instruments directly, after the complete deregulation of the market and the shift to the full convertibility of the RON, once the three-month deposit certificate issue planned by the NBR has been released.
The central bank will remain the only issuer of short-term instruments, seeing as the Finance Ministry cancelled the treasury certificate issues announced for the third quarter.
Given the scarcity of instruments and the shallowness of the market, September 1 goes into the history of the Romanian financial market only as the formal date when the RON moved to the fully convertible currency status as a result of the complete opening of the non-residents' access to Romanian monetary instruments, as well as of Romanians' access to instruments issued on foreign markets.
As expected, nothing spectacular happened in terms of trades with convertible RON: the RON appreciated by 0.5 bani (100 bani equal 1 RON) against the euro and depreciated by 0.3 bani against the American dollar. These moves were caused by the local customers of the banks rather than foreign investors.
As a paradox, the market is open, yet the instruments meant to attract the foreigners' money are lacking. Non-residents have been allowed to invest in Romanian public bonds since as early as March 2006, but the Finance Ministry has not issued even a single such bond, given the institutional incapability to spend the available money, despite badly needed investments.
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