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Isarescu: movements in the domain of foreign exchange rate of the last period were normal of 1%
The movements in the foreign exchange rate of the last period, through which the leu went down or up by almost 1% against the euro, were normal, as the exchange rate is established by the market, not by the BNR and the number of operations on the foreign exchange market is of 3,000 – 10,000 per day, stated on Monday the Central bank (BNR) governor Mugur Isarescu.
On 21 June, BNR announced an exchange rate of 4,5987 lei/euro up by 0.07% against the previous level and a new maximum level of 3 August 2012, as the investors expected the result of the vote for the censure motion presented by the ruling alliance PSD-ALDE (Social Democratic Party and the Alliance of Liberals and Democrats ) against their own government and clarifications about the formation of a new government.
The governor stated on Monday that the movements on the foreign exchange market of the last period were within normal limits, of almost 1% as the euro went up or down by comparison to the American dollar or by almost 5%. Moreover, Isarescu considers that this exchange rate is established by the market, not by BNR intervention.
‘There are 3,000 – 10,000 operations daily on the foreign currency market. None goes through BNR. Romania has the same advantage of having a stable exchange rate. (…). Somebody said that this exchange rate is established by Isarescu. I am flattered. To be told that I can control thousands of operations’ the governor said.
The governor said that there is no exchange rate belonging to BNR but to the market and the role of the bank is to make an average of the existing quotations on the market.
‘BNR does not set the exchange rate, they calculate it .And when we intervene, we rarely intervene directly on the market. (…). We don’t’ say when we do it. No central bank does. (…).An intervention has many significations. When we buy foreign currency, we introduce lei on the market, we sell foreign currency, we absorb lei. The implications are much more complicated than they seem’ Isarescu said.
After the nomination of the new government and the reduction of the political tension, the leu went up gradually by comparison to the euro. BNR announced on Monday an exchange rate of 4,5560 lei/euro up by0.05% against the previous level, as the leu went down as a regional trend.