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Isarescu: Tension peak generated by COVID 19 crisis in banking field was exceeded
Central Bank - BNR governor Mugur Isarescu says the peak of tensions generated by COVID 19 crisis in the banking field was exceeded. Over March 11-20 March cash withdrawals from BNR by credit institutions, meant to cover people's and companies' demand, were double compared to the period of winter holidays, 2019.
“The peak of tensions generated by COVID 19 crisis in the monetary, banking and financial field was exceeded. While in the period March 11-20, 2020 cash withdrawals from BNR by credit institutions, to cover the people's and companies' demands reached the record level of 4.4 billion lei (twice more than in December 2019, the time of winter holidays) were substantially reduced these days. The cash value at credit institutions grew, which means that they can now cover cash needs for payments and the fluent supply of ATMs,” Isarescu declared on Tuesday.
According to the BNR governor, the BNR cash reserve fund remained within the prudence limits and has grown slightly in the last few days.
Even though at the level of the whole financial-banking system there was cash excess, the preference for cash specific of crisis periods caused, in the days following the declaration of the emergency state, temporary and punctual blocking in financing budget and real economy expenses as well as some interest rate increases, especially in the monetary market, Isarescu said.
According to the BNR governor, after announcing measures of monetary policy decided by BNR, cash flows were significantly fluid, due to operations made by BNR, financing state expenses were carried out without difficulties while interest rates dropped significantly. The leu exchange rate stabilised at a rate of 1% with a slight appreciation tendency in the last days, which prevented the increase of state expenses by financing public debt in foreign exchange and imports needed in this period, while on the other hand, it calmed down anticipations of deterioration of the macroeconomic situation.