Economic measures in times of crisis
Central Bank governor says the peak of monetary and financial tensions is already behind us
Daniela Budu, 01.04.2020, 13:50
As of Wednesday, in Romania employers may apply for governmental funds to pay their employees in idle time. The applications may be submitted online, to the county employment agencies. The same type of aid is available not only for companies with employees, but also to the self-employed. In order to benefit from these funds, employers must submit to county employment agencies an application, a sworn statement and a list of the employees on idle time.
The Labour Minister, Violeta Alexandru, promised that all applications will be processed as quickly as possible. Idle time benefits are capped at around 800 euros per month, before tax and healthcare and pension contributions. According to the latest data, over 500,000 employees have already seen their employment contracts temporarily suspended over the coronavirus crisis. Tax analysts warn however that the idle time benefits, accounting for maximum 75% of the gross salary, will be subject to the same tax rates as the regular salaries.
Meanwhile, the governor of the National Bank of Romania, Mugur Isărescu, says that the tensions created by the COVID-19 crisis in the monetary, financial and banking sector have already reached the peak and will subside. Isărescu explained in a news release that after successive days with substantial cash withdrawals, the situation is now stable.
According to the central bank governor, there were isolated, temporary bottlenecks shortly after the state of emergency was announced. Between March 11 and 20, banks withdrew some 900 million euros in cash from the central bank, in order to cover the demand for cash from their clients. This was double the figure reported during the winter holidays in December 2019.
Over the past few days, however, the National Bank says, withdrawals fell substantially, and at present banks are able to cover their ATM and payment needs from their own resources. The cash reserves of the National Bank also stayed within prudential limits and increased slightly in the last several days.
According to the central bank, there are no problems in covering the demand for cash in local currency. The bank recommends nonetheless that individuals and companies try and use non-cash payment instruments as much as possible these days.
After the National Bank announced its monetary policy decisions, interest rates were cut considerably, and the exchange rate for the national currency stabilized within a 1% range, with a slight upward trend reported lately, the central banks news release also reads.
(translated by: Ana-Maria Popescu)
