RO central bank believed to have intervened massively to stop currency depreciation

Romania’s National Bank (BNR) is believed to have poured around EUR 600 million into the foreign exchange market in just one day, on November 28, to reverse and prevent further depreciation of the local currency. BNR made this move after the exchange rate reached RON 4.8066 RON to EUR on the foreign markets in the previous night, Economica.net informed quoting unofficial sources.

Overall, in November, BNR spent about EUR 1.2 billion from the own forex reserve through interventions aimed at defending excessive depreciation of the local currency, according to unofficial estimates of the bankers, the source also said.

The central bank governor’s adviser on strategy matters, Adrian Vasilescu, contacted by Bursadaily to confirm the intervention, avoided commenting about the reported direct interventions.

However, he explained that the whole currency volatility is actually the so-called “November Syndrome”: importers build up inventories ahead of the seasonal sales peak.

Tax expert Adrian Benta recently explained that importers are not actually paying at delivery but with a delay of several months, and concluded that the local currency will reflect the higher November imports no sooner than January-February next year.

On a more fundamental note, independent analyst Dragos Cabat said that the macroeconomic data do not support a weakening of the exchange rate to over RON 4.85 to EUR by the end of the year.

The sentiment will improve on the forex market after the Government unveils the budget planning for 2020, Cabat added.

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