Isarescu: Who Had Cash To Buy 1 Bln Euros?

06.07.2011 By Chiru Liviu Mihai

Governor Mugur Isarescu questioned the accuracy of ING Bank’s calculations which indicate the central bank has sold EUR1 billion in May to keep the exchange rate stable.

"Those who make such calculations should try to go a little deeper," Isarescu told a seminar Tuesday.

"Had we sold EUR1 billion, then we must have absorbed 4 billion lei from the market. However, can there be such a liquidity surplus on the market at the end of the month, just when the banks have to set the minimum reserve requirements?" he added.

Isarescu reiterated the central bank doesn't release data on potential interventions in the money market, nor does it make comments on the matter.

On the other hand, the governor had something to say about a series of scenarios regarding the leu's exchange rate.

The Romanian Businessmen Association (AOAR) recently pleaded for a weaker leu, at around 4.7-4.8 versus the euro, saying a lower exchange rate would protect exports. The businessmen cited data from a survey released by British researcher the Economist Intelligence Unit.

"Still in London, Barclays said a fair value of the exchange rate would be 4 lei per euro. After all, Barclays is a better researcher than the EIU," Isarescu said.