The peak of the tensions generated by the COVID-19 crisis in the monetary, banking and financial sectors has been overcome, the governor of Romania’s National Bank (BNR) said in a press release.

The statement, however, refers to a specific dimension of the markets outlined by governor Mugur Isarescu - namely the cash and liquidity management.

After the state of emergency was declared on March 16, the interest rates on the money market increased but the monetary policy decisions (BNR’s decision to cut the monetary policy rate) removed the tensions and improved liquidity, governor Isarescu commented.

As regards the cash management, during March 11-20, local banks withdrew record amounts of cash from the central bank in order to cover the demand from the population and companies (RON 4.4 billion, twice more than in December 2019 during the holiday sales period). However, in the last days, the demand for cash has decreased, governor Isarescu explained.

The value of the cash in the bank’s vaults remains robust, meaning that the banks can now cover from their own resources the cash needed by the market.

The BNR's cash reserve fund has remained within the prudential limits and has even grown slightly in recent days, the central bank’s governor assured.

editor@romania-insider.com

(Photo source: Bnr.ro)