* The Ministry of Finance borrowed 1 billion lei through 7-month certificates

A number of five banks yesterday attracted 2.38 billion lei yesterday (546 million Euros) from the National Bank of Romania (NBR), with a maturity of one week, at the policy rate of 6% p. a.. The liquidity injection was made through a repo operation, through which the NBR provides liquidity to the banks and receives government bonds in exchange.

On the last day of the past week, the Central Bank had lent to seven banks 1.657 billion lei (380 million Euros), again through a repo auction.

Mr. Daniel Ionescu - analyst in macro-finance - said: "Through this kind of operations, the NBR accepts taking into custody receivables found in the portfolios of the banks, including government bonds and releases liquidity, effectively creating money «ex-nihilo».

In my opinion, what the NBR did yesterday is in fact an advance preparation of the government bonds auctions which the Ministry of Public Finance will carry out this month, being intended to ensure the liquidity needed to buy them from the commercial banks in question. These operations are "repo" contracts with a 1-week maturity which are completed through the opposite operation on maturity, through operations called "reverse-repo" by which the money created is destroyed. According to records displayed on the website of the NBR and to my knowledge, such operations were seldom conducted. It is possible that the extension of the deadline for the reverse repo may be performed «a la longue», so the NBR will accumulate more government bonds. We should remember that at the end of last year, the NBR had receivables in custody (including, and in particular, government bonds) worth more than 68 billion lei".

For the month of December, the Treasury plans to borrow 4.5 billion lei from banks, through five issues of governm