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BNR's Isarescu: In 1991, inflation was 170pct, next year, 300pct; now we have negative inflation
Romania has reached minus 0.8 percent negative inflation, from 170 percent in 1991, and the foreign exchange reserves went up from 54 million dollars to 35 billion dollars in the 25 years since the reopening of the foreign exchange market, National Bank of Romania (BNR) Governor Mugur Isarescu said on Thursday.
"In 1991, inflation was standing at 170 percent, the next year it was 300 percent. Prices were denominated in US dollars, Romanians were fleeing from the [local currency] leu, and not we have negative inflaiton. The forex reserve stood at, I believe [my colleagues] took the best month, 54 million dollars. Now we have 35-billion-dollar reserves, and the gold reserve has almost doubled in quantity (...)," Isarescu told a conference on a quarter of a century since the reopening of the Romanian foreign exchange market.
Moreover the BNR average interest was 18 percent and now it stands at 1,75 percent per annum, according to data presented by the BNR Governor.
Isarescu said the entire monetary base of Romania is 70 billion lei, namely 15 billion euros, which means that the BNR issue is two times covered by reserves.
Moreover, Isarescu said that two years ago there were only 6 participants in the foreign exchange market and now there are 37.
"We have reached the place we set for in 1991. It all started with the Petre Roman Cabinet, those who worked on the reform and complete transformation of the Romanian economy. The first auction was the fruit of the efforts of several enthusiasts at the time in the BNR management, in a few specialist directorates and with support of technical assistance from the International Monetary Fund and the Bank of Belgium," said Isarescu.