Romania’s National Bank (BNR) should have intervened to stop the local currency’s depreciation against the euro, prime minister Mihai Tudose said on Thursday last week.

BNR allowed banks to reduce the minimum reserve level, which may have contributed to the euro reaching record highs against the RON, Tudose argued, reports local Ziarul Financiar. He explained that by cutting the minimum reserves from 10% to 8% of the bank deposits, BNR allowed banks to take EUR 500 million of which EUR 280 million has already left the country.

“They had lei and changed them to euro to get them out of the country,” the PM said.

The Government needs to have “a very serious talk” with the BNR management about the role of a national bank, the prime minister said.

The local currency’s depreciation could also be “a revenge” of some banks. “Maybe it’s a revenge of a part of the banking system because we make them pay taxes,” Tudose said.

He also said that there were “objective factors” in the local currency’s depreciation, such as higher domestic consumption of imported products.

Central bank representatives replied to Tudose on Friday. BNR carries out its mandate will all responsibility, and the institution’s Board of Directors could invite prime minister Mihai Tudose for a talk, BNR spokesperson Dan Suciu said on Friday.

"Until now, we have been accused of intervening too much in the market and affecting the reserve. The prime minister is now saying that we are not doing enough,” he added.

“Should I understand that he recommends us to increase the monetary policy rate, because this is the instrument that we have at our disposal,” Suciu said.

In early October, the Social Democratic Party (PSD) leader Liviu Dragnea accused BNR of not intervening to stop the increase in interbank interest rates – ROBOR, which are the reference for loans in local currency. The 3-month ROBOR reached 2.19% per year on Friday, November 24, more than double the level recorded in September. Meanwhile, the EUR/RON exchange rate reached an all-time high of 4.6551 on Tuesday, November 21.

editor@romania-insider.com