The reduction of required reserve ratio for leucurrency liabilities, enforced by National Bank of Romania (BNR) in October 2008 was a mistake, and the central bank sold the foreign currency afterwards in an attempt to drain the liquidity in the market, said Mugur Isarescu, governor of BNR.
“I voted for the reduction of required reserve ratio, but it was a mistake. The measure had seemed the most appropriate, given the mistrust and politic debates, and the situation triggered afterwards could have been resolved only by a sale of foreign currency”, added Isarescu.
Analysts have repeatedly suspected the indirect intervention of BNR in the currency market designed to cap the worrying increase of the euro against leu.
“The sale of foreign currency was the only reasonable solution. Some analysts observed the moves which reflected in the decline of foreign currency reserve”, said the governor.
