Romania could be flooded by speculative capital, Mugur Isărescu, the governor of the NBR said last week. He stated: "We will try to discourage excessive volatility of the exchange rate through other unorthodox steps, but at the same time it is very important to ensure the competitiveness of Romanian products".
Adrian Vasilescu, advisor to the NBR governor, said that Romania could once again see capital inflows, since the country"s economic reports are favorable. "Capital inflows are a good thing, in particular those coming in for the long term, which would stay in the country for a longer time and which would bring in direct investments", said Adrian Vasilescu. He added that excessive control of capital inflows is not a solution, because they are always able to find their way towards their destination. Instead, the solution is to have a well prepared, restructured economy, that is able to absorb foreign capitals.
Furthermore, Adrian Vasilescu said that the unorthodox measures to discourage the volatility of the exchange rate, that Mugur Isărescu mentioned, could be rules that would temper an excessive boost in lending by banks or high levels of the minimum forex mandatory reserves.
* Analysts: Inflows of speculative capital will be modest in size
Analysts don"t share the opinion of the governor of the Central Bank, in fact, they maintain that when dealing with an open economy, it is normal to have flows of speculative capital. They consider that the size of speculative capital that could potentially enter Romania might not be as big as they were in the previous years.
Furthermore, some analysts consider that the entry of speculative capital is not a cause for concern, what is more important is how the money will be used, to avoid wasting it.
Florin Cîţu, economic analyst, considers that the message of the governor is that the leu
