Romanian government’s forex buffer estimated at 5% of GDP

By bne IntelliNews August 21, 2013

The foreign exchange reserve of Romania’s finance ministry amounts to EUR 6bn [some 5% of GDP] and covers the government’s financing needs for five full months, budget minister Liviu Voinea said, quoted by Agerpres. The required coverage set under the 2011-2013 SBA with the IMF was for four months, Voinea added.

The buffer forex reserve hit EUR 6.4bn recently, but the Treasury made EUR 400mn payments on August 19 and it fell to EUR 6bn, the budget minister explained. The reserve includes the EUR 1bn credit line available from the World Bank.

Earlier this week, the government published in the official journal a finance ministry’s decision on maintaining a forex reserve sufficient to cover the public financing needs over a period of at least four months. The decision is aimed to protect the government from unexpected external shocks, the document explains.

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