Romanian central bank's forex reserves shrink in February

The foreign exchange reserves of the National Bank of Romania (BNR) decreased by EUR 1.22 bln in February, compared to January, to EUR 41.8 bln, after EUR 3.22 bln entered the central bank's vaults during the month and EUR 4.45 bln was used for various purposes.

In January, the reserves had increased by EUR 2.6 bln driven by the EUR 2.1 bln driven by the net proceeds from the two Eurobonds issued during the month.

In December and January, the European Union has transferred to the BNR accounts under the Resilience Facility EUR 1.84 bln and EUR 1.84 respectively - but this money is supposed to be transferred to the Ministry of Finance.

In February, the Finance Ministry used USD 2.08 bln of its reserves held at the Central Bank to repay a Eurobond that matured.

On the upside, Romania issued in February Eurobonds for the second time this year, raising EUR 2.5 bln with two issues of EUR 1.25 bln each and six-year and 12-year tenors, respectively - meaning that overall, the flows generated by Eurobond operations should have been positive.

The negative balance of flows in February most likely reflects Resilience Facility funds being transferred from BNR to Finance Ministry. Forex market interventions can not be ruled out towards the end of the month particularly.

The 103.6 tons of gold reserves at BNR were valued at the end of the month at EUR 5.67 bln, Ziarul Financiar reported. This puts Romania's international reserves (currencies plus gold) at EUR 47.5 bln, compared to EUR 48.4 bln at the end of January.

Payments due in March 2022 on account of public debt denominated in foreign currency, direct or guaranteed by the Ministry of Finance amount to about EUR 111 mln.

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