First tranche of Resilience Facility pushes up Romania’s forex reserves in December

Romania’s foreign exchange reserves at the National Bank of Romania amounted to EUR 40.47 bln at the end of December, almost EUR 1.2 bln more compared to the end of November and nearly EUR 3.1 bln at the end of 2020.

The increase in December was due to robust forex inflows of over EUR 5 bln, which included the first tranche granted by the European Commission under the Resilience Facility (EUR 1.85 bln).

Another tranche slightly larger is expected to boost the country’s forex reserves in early January, while the EUR 30 bln expected by Romania under the Resilience facility (of which EUR 14 bln grants) will keep the forex reserves on an upward path in the medium term.

Separately, the inflows will support the local currency against weakening resting conditions for appreciation in real terms.

The forex outflows from the central bank’s vaults were significantly high in December as well (EUR 3.83 bln), and, out of this, the service of the public external debt accounted for only EUR 216 mln.

The standard reason for such moves are the central bank’s interventions - but this time, the funds might have been simply passed to the Ministry of Finance - the recipient of the EUR 1.85 bln Resilience facility grants.

The gold stock remained steady at 103.6 tonnes, and its value amounted to EUR 5.36 bn.

Thus, at the end of 2021, Romania’s international reserves (foreign currencies and gold) stood at EUR 45.83 bn, compared to EUR 44.59 bn on 30 November 2021 and EUR 42.52 bln at the end of 2020.

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