The foreign exchange reserves (forex buffer) held by the Finance Ministry at the National Bank of Romania (BNR) shrank by EUR 1.1 billion in December, from some EUR 5 billion at the end of November to around EUR 3.9 bln at the end of the year, Profit.ro reported.
As the new Government used part of its forex buffer to finance the unexpected deficit spike toward the end of the year, the opposition Social Democratic Party (PSD) used the opportunity to blame finance minister Florin Citu of “having abused the country’s foreign exchange reserves”.
The buffer at the end of the year is reportedly EUR 1.3 bln lower than the target set by the previous Government (about EUR 5.2 bln), Profit.ro commented.
Based on open data from the Finance Ministry, the source estimates that the buffer is EUR 2.3 bln lower than required. The estimate sets 4 months of gross financing needs as the optimum level.
Indeed, the Finance Ministry recently announced EUR 18.1 bln gross financing needs for 2020, which results in EUR 6 bln optimum forex buffer.