Romania's finance minister assures public finance, exchange rate are under control

Finance minister Florin Citu assured that Romania has an “optimum size buffer” to face any funding or exchange-rate pressure and announced yet unspecified measures to bring the budget deficit down to around 3% of GDP, according to Bloomberg.

Romania will tap the international markets “in the first part of next year,” since the financing needs are safely covered by the internal market where there is a strong demand for state bonds at this moment, the finance minister added.

“We have an optimum size buffer” of foreign reserves, Citu said in an interview from Brussels on Wednesday, December 4, although it’s the central bank not the Finance Ministry that is responsible for the interventions on the foreign exchange market.

“If we need it, we’ll step in the market and use it,” he said, declining to elaborate on the amount of cash available.

Speaking of public finance, the Government projects 4.4%-of-GDP budget deficit this year according to the budget revision passed recently. Citu said the Government plans to unveil cuts in some “lavish” expenditures within the next two weeks, aimed at bringing the deficit down to around 3% of economic output next year. He declined to go into specifics, other than saying that the Government doesn’t want to “step too much on the brake,” amid a worsening global outlook weighing on growth prospects.

The 3%-of-GDP target for next year mentioned by Citu is a more optimistic scenario compared to the 3.5% initially announced when the Government started working on the budget planning for 2020.

(Photo source: Inquam Photos/Octav Ganea)