The rising prices of gold and RON decline have driven the central bank's balance sheet into the black.

Last year, the National Bank generated net income worth a little more than 137m euros, after over the past years it logged massive losses due to the high costs related to the purging of surplus RON on the market in a bid to keep inflation down.

Last year, the NBR generated 868m euros in the form of revenues from the management of the international reserve, while expenses related to interest rates paid for the sums raised from banks as part of monetary policy operations amounted to 382m euros.

In RON, the NBR's net income last year reached 458.4m RON, after a 4.3bn RON loss in 2006. Between 2003 and 2005, the NBR registered losses that ranged between 1 and 3.5bn RON.

"The income the National Bank derived in 2007 has been entirely distributed to cover losses posted in previous years, thus marking the start of the cycle to recover the losses of 2005 and 2006," reads the Annual Report of the institution, published on Wednesday.

The NBR also expects to generate profit in the coming years and to cover its losses.

The central bank expects smaller efforts to purge surplus RON on the monetary market. Thus, whereas two years ago the NBR had deposits worth over 20bn RON raised from banks, the volume dropped to 2.6bn RON (708m euros) in April.

The NBR also expects rising profit from international reserve management in the coming years due to an increased volume, on the one hand, and better yields, on the other.

In late May, NBR's international reserves stood at 24.91bn euros, slightly down compared with the start of the year.

Last year, the central bank generated operating income (particularly fuelled by revenues from the placement of international reserves) worth 1.37bn RON (the equivalent of 412m euros). In 2006, the opera