Erste estimates Romania's central bank sold EUR 6 bln to keep currency stable after presidential ballot

The National Bank of Romania (BNR) probably spent/sold EUR 6 billion of its foreign exchange reserves to prop up the local currency (leu) last week after the victory of far-right presidential candidate George Simion in the first round of elections, which led to the collapse of the government, according to an analysis by Austrian bank Erste consulted by Economedia.ro.

The amount represents about 10% of total foreign exchange reserves. At the end of March, foreign exchange reserves stood at EUR 62 billion.

Official sources told G4media.ro last week that the National Bank of Romania spent EUR 2 billion on Monday alone to maintain the stable exchange rate of the RON after George Simion's victory. The pressure on the national currency began on Monday morning and intensified in the afternoon as investors tried to get rid of RON and buy euros to protect their deposits, the same sources said.

Another official source told G4media.ro that the amount spent by the NBR is slightly less than EUR 2 billion.

Dan Suciu, the spokesperson of the National Bank of Romania, confirmed to G4media.ro the pressure on the RON exchange rate.

"Recently, there has been an important change in the foreign exchange market. Capital inflows have decreased, and outflows have increased significantly. Consequently, in order to temper these movements, liquidity must be attracted from the market, and interest rates must increase. The National Bank of Romania will seek an optimum for this situation," Dan Suciu said.

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