Profile picture for user iuliane
Iulian Ernst
Senior Editor

Iulian studied physics at the University of Bucharest, and he sees himself as a physicist in the broadest sense of the word. He also studied economics at Charles University in Prague and Central European University in Budapest, after a master’s program in business administration at Bucharest Academy of Economic Studies. Since recently, he’s been exploring coding and data analysis for business and economics. As a freelancer, he worked for nearly two decades as an analyst for ISI Emerging Markets, Euromonitor International, Business New Europe, but also as a consultant for OMV Petrom and UkrAgroConsult. Iulian was part of the founding team of Ziarul Financiar. At Romania Insider, which he joined in 2018, he is reviewing the latest economic developments for the premium bulletins and newsletters. He would gladly discuss topics such as macroeconomics, emerging markets, Prague, energy sector including renewable, Led Zeppelin, financial services, as well as tech start-ups and innovative technologies. Email him at iulian@romania-insider.com. 

 

Romania’s central bank returns to market in March-April to provide liquidity

The National Bank of Romania (BNR) returned to buy government securities on the secondary market in March and April this year (May data not available yet), after a 6-month break. The magnitude of the intervention was small, RON 247.4 mln (EUR 50 mln) in the two months - far from the RON 5.28 bln (EUR 1.05 bln) in April-August, Hotnews.ro reported.

The strong economic recovery may have eased the public financing pressures, and the banks showed robust aggregate liquidity position - but the rising inflation expectations and liquidity problems concentrated in some segments of the banking market (small-sized banks) may make such interventions necessary this year as well.

The International Monetary Fund (IMF) recommended “extending monetary accommodation beyond this year [...], as long as consistent with the inflation target.”

On the other hand, the head of the CFA Association, Adrian Codirlasu (citing rising inflation), implied expectations for a rate hike this year - a scenario not considered as likely by the CFA members until recently. Robust GDP growth is also supporting such expectations.

In March 2020, in response to the pandemic, BNR announced that it had decided to “buy government bonds from the secondary market to strengthen the structural liquidity of the banking system to help finance the real economy and public sector." The intervention was needed “to secure liquidity strictly related to the need for financing and to lower interest rates sustainably, consistent with the constraint of preventing the excessive volatility of the exchange rate and the unnecessary depreciation of the national currency.”

iulian@romania-insider.com

(Photo source: Lcva/Dreamstime.com)

Normal
Profile picture for user iuliane
Iulian Ernst
Senior Editor

Iulian studied physics at the University of Bucharest, and he sees himself as a physicist in the broadest sense of the word. He also studied economics at Charles University in Prague and Central European University in Budapest, after a master’s program in business administration at Bucharest Academy of Economic Studies. Since recently, he’s been exploring coding and data analysis for business and economics. As a freelancer, he worked for nearly two decades as an analyst for ISI Emerging Markets, Euromonitor International, Business New Europe, but also as a consultant for OMV Petrom and UkrAgroConsult. Iulian was part of the founding team of Ziarul Financiar. At Romania Insider, which he joined in 2018, he is reviewing the latest economic developments for the premium bulletins and newsletters. He would gladly discuss topics such as macroeconomics, emerging markets, Prague, energy sector including renewable, Led Zeppelin, financial services, as well as tech start-ups and innovative technologies. Email him at iulian@romania-insider.com. 

 

Romania’s central bank returns to market in March-April to provide liquidity

The National Bank of Romania (BNR) returned to buy government securities on the secondary market in March and April this year (May data not available yet), after a 6-month break. The magnitude of the intervention was small, RON 247.4 mln (EUR 50 mln) in the two months - far from the RON 5.28 bln (EUR 1.05 bln) in April-August, Hotnews.ro reported.

The strong economic recovery may have eased the public financing pressures, and the banks showed robust aggregate liquidity position - but the rising inflation expectations and liquidity problems concentrated in some segments of the banking market (small-sized banks) may make such interventions necessary this year as well.

The International Monetary Fund (IMF) recommended “extending monetary accommodation beyond this year [...], as long as consistent with the inflation target.”

On the other hand, the head of the CFA Association, Adrian Codirlasu (citing rising inflation), implied expectations for a rate hike this year - a scenario not considered as likely by the CFA members until recently. Robust GDP growth is also supporting such expectations.

In March 2020, in response to the pandemic, BNR announced that it had decided to “buy government bonds from the secondary market to strengthen the structural liquidity of the banking system to help finance the real economy and public sector." The intervention was needed “to secure liquidity strictly related to the need for financing and to lower interest rates sustainably, consistent with the constraint of preventing the excessive volatility of the exchange rate and the unnecessary depreciation of the national currency.”

iulian@romania-insider.com

(Photo source: Lcva/Dreamstime.com)

Normal
 

facebooktwitterlinkedin

1

Romania Insider Free Newsletters