Romania's Social Democrat Party (PSD) leader Liviu Dragnea and PSD senator Şerban Nicolae have submitted a project to change the law on the statute of Romania's National Bank (BNR). According to the project, 95% of the bank’s gold reserves would have to be kept in the country.
This means that Romania should repatriate most of the gold it holds at the Bank of England (61 tonnes out of the total 104 tonnes, according to Profit.ro). The authors of the law, quoted by Profit.ro, claim that the move would save some EUR 0.3 million in fees per year, while the central bank argues that the cost of keeping the gold abroad is some RON 0.3 million (EUR 64,000).
“Out of the established reserve, the National Bank of Romania can deposit gold abroad exclusively with the purpose of obtaining revenues from transacting and other specific operations. The gold deposits established by BNR abroad cannot exceed 5% of the total gold reserve,” according to an article of the project, quoted by Adevarul.
The same project establishes that BNR maintains its reserves at a level adequate for Romania’s external transactions. If the reserves are in danger of diminishing, BNR presents a report to the Parliament and the Government about the causes of the situation and the situation of the reserves, plus recommendations to prevent or remedy the situation, according to the project.
The project is registered to be debated in the Senate under urgent procedure.
The evolution of Romania’s economy over the past years is positive, “with constant, solid and sustainable growth, moderate inflation, within manageable limits, and predictable stability of the national currency.” Under these circumstances, BNR’s policy regarding the establishment and administration of gold reserves can change, the project's initiators argued.
“Nothing in Romania’s economic situation justifies keeping such a quantity of gold as a reserve abroad, with the associated costs, which are not to be neglected, when this reserve can be kept and supplemented, accordingly, in deposits in the country,” the two PSD leaders argued.
Keeping gold in deposits abroad would not be necessarily forbidden but “limited quantitatively and conditioned on obtaining revenues from transacting and other specific operations.”
BNR governor Mugur Isărescu explained that the reserves are kept in accounts. “I have been accused that I keep the reserves abroad. As if I am the one to keep them, as if they were mine. Where do you want us to keep them? These are international reserves; do you think the euros and the dollars are kept in BNR's basement? They are kept in reserves,” the governor said, quoted by Adevarul.
At the end of January 2019, Romania’s international reserves (currency and gold) stood at EUR 35.765 billion, compared to EUR 36.8 billion at the end of December 2018. The gold reserve was of 103.7 tonnes and was valued at EUR 3.843 billion.
BNR keeps part of its gold reserve at the Bank of England, the second-largest custodian of gold in the world, after the New York Federal Reserve. The last transfer of gold to the Bank of England was made before the international financial crisis. BNR also keeps some gold in its vaults, at its headquarters in downtown Bucharest.