Romania forex reserves

Romania’s December forex reserves rise to €40.4 billion

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Romania’s foreign exchange reserves (forex) stood at EUR40.4 billion at the end of December 2021, compared to EUR 39.2 billion on 30 November 2021, central bank data showed on Monday (Jan. 3).

Last month’s increase was due to robust forex inflows of EUR 5.023billion, which included the first tranche of the loan from the European Commission under the National Recovery and Resilience Plan – NRRP – in amount of EUR 1.85 billion, equivalent to 13% of the country’s grant allocation under the Recovery and Resilience Facility (RRF).

The NRRP is structured around 6 pillars defined by the RRF Regulation and divided into 15 components, so as to cover Romania’s needs and simultaneously pursue the European Commission’s priorities.

The RRF is to provide up to EUR 800 billion to support investments and reforms across the EU as part of the bloc’s response to the COVID-19 crisis.

The South East European country is set to receive EUR 29.2 billion in total, consisting of EUR 14.2 billion in grants and EUR14.9 billion in loans,  keeping the forex reserves on an upward path in the medium term. The money will be given in installments, depending on the fulfillment of some objectives, called milestones and targets. In total, there are 507 milestones and targets to be met by December 31, 2026.

During the month of December 2021, EUR 3.83 billion worth of outflows from the central bank’s vaults were recorded representing: changes in credit institutions’ foreign currency-denominated required reserves with the National Bank of Romania (BNR) ; interest payments and principal repayments on foreign currency public debt and other, BNR said.

The gold stock remained steady at 103.6 tonnes. However, following the change in the international price of gold, its value amounted to EUR 5.36 billion. On Dec. 23, 2021 gold was quoted at the $1,807 level per troy ounce, up 2% from just before the US Federal Reserve’s Dec. 15 announcement of a decision to accelerate the tapering of its quantitative monetary easing policy.

Thus, on 31 December 2021, Romania’s international reserves (foreign currencies and gold) stood at EUR 45.83 billion, compared to EUR 44.59 billion on 30 November 2021 and EUR 42.52 billion at the end of 2020.

Of note, central banks around the world are increasing the gold they hold in foreign exchange reserves, bringing the total to a 31-year high in 2021.