Record foreign exchange reserves
Romania's foreign exchange reserves have reached a record level.
Leyla Cheamil, 04.06.2024, 14:00
Foreign exchange reserves at the National Bank of Romania totaled more than 65 billion Euros at the end of last month this year. The announcement was made by the Central Bank which pointed out that there was an increase of 4.1% compared to the level of more than 62.5 billion Euros at the end of April 2024. Exceeding the ceiling of 65 billion is a historic evolution for an indicator on which the stability of the exchange rate and of prices respectively depend directly. This increase was mainly due to filling the accounts of the Finance Ministry, in May, with the sums resulting from the issuance of Euro-bonds, totaling more than 3.2 billion Euros. The consequences of this increase are the strengthening of the confidence of financial markets and investors in the financial creditworthiness of Romania, and also in terms of supporting the instability of the exchange rate of the national currency, the leu. Specialists emphasize, however, the volatility of financial markets all over the world.
Economic analyst Aurelian Dochia is at the microphone with details: “We are in a very volatile international situation, the international financial markets are very uncertain about the direction that they will go, and, because of that, it is good to have higher international reserves, which are a kind of safety belt in case of turbulences that may occur. The fact that the reserves have increased shows, in my opinion, that we only have to be prepared for a further development, which will correct the large trade deficit we have had for many years and make exports more competitive”.
Aurelian Dochia specified that part of the currency that is part of the foreign exchange reserves comes from European funds, which are then converted into lei and used by the Finance Ministry to finance investment projects. The economic analyst pointed out that, although the increase in Romania’s foreign exchange reserves is good news, less favorable aspects must also be taken into account.
Aurelian Dochia: Track: “Probably, the fact that some of these investments did not take place according to the planned terms may also be a negative aspect of these reserves. Also, according to many analysts, the fact that Romania has shown a remarkable stability of the exchange rate in recent years, despite the turbulence that has engulfed all markets, also has a negative aspect, because, in the context in which the national inflation rate has increased very much, it was at one point 16%, and the exchange rate has remained almost unchanged, our exports are affected. They cannot be competitive with this exchange rate”.
Let’s also mention that the level of the gold reserve remained at over 103 tons. In the context of international price developments, its value was almost 7,2 billion Euros. Thus, at the end of last month, Romania’s international reserves – foreign currencies plus gold – were over 72.2 billion Euros. (LS)
