Putting off the disbursement of the third tranche under the aid deal with International Monetary Fund urged the policymaking board of the National Bank of Romania to hold a “special session”, in which the central bank agreed to cut the reserve requirements for fx-denominated liabilities for banks from 30% to 25% in an effort to address “the governmental sector’s financing needs”.
NBR frees up €1-1.2 billion for lenders
The policymaking board of the central bank met yesterday in a “special session” to assess the impacts of the aid deal delay on the local budget, monetary and fiscal environment.
The conclusion of the yesterday’s session was that “in the context of a postponement in the disbursement of the third tranche under the stand-by arrangement with international institutions, addressing the financing needs of the governmental sector in the final quarter of the year, as well as maintaining macroeconomic balances, requires us to secure adequate financing conditions in the domestic banking industry”, the central bank said in a release.
The central bank has cut the reserve requirements for foreign currency denominated liabilities for banks with residual maturity of up to 2 years, from 30% to 25%, effective November 24 – December 23. The bank regulator has thus freed up more cash in the market, money that will most likely be used to bridge the budget gap. Sources at the central bank told Wall-Street, that the move would release €1-1.2 billion.
“NBR’s decision is not common, but is not surprising since the external financing initially scheduled for December has been put off. The measure was needed, and the central bank’s decision will only fill the financing gap”, Adrian Vasilescu (photo) adviser to the NBR governor told Wall-Street.
Analysts: The cash freed up will go to a new club loan
The €1-1.2 billion freed up by th
