Articol publicat pe site-ul BURSA On Line, ediția din 30.08.2017
"The movement of the exchange rate - the best way for the NBR to pressure MPs"
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    *  Senator Daniel Zamfir wants to call Mugur Isărescu in for hearings, next week

     *  Isar: "The opening of the parliamentary session involves multiple negotiations"

     *  The leu has weakened to 4.5985 lei against the Euro
       The leu yesterday weakened again, reaching the level of 4.5985 lei against the Euro, after on Monday it was quoted at 4.5958 lei.

     Analyst Lucian Isar thinks that the rise of the latest period of the Euro puts a pressure on politicians to prevent them from tackling certain issues. The former banker told us: "The Euro-leu exchange rate is a controlled exchange rate, manipulated by the NBR. The opening of the parliamentary session involves multiple negotiations. And the circumstances in which it is already announced the presence of Governor Isărescu in the Economic Commission of the Senate, the movement of the exchange rate is the best way to pressure the politicians in the government, to prevent the topics that are sensitive and crucial for the governor personally from being discussed, such as for example the issue of his pension".

     Recently, Liberal Daniel Cătălin Zamfir, the president of the Economic commission in the Senate has announced that in the first week of the new parliamentary session will summon NBR governor Mugur Isărescu in the parliament to explain why he hasn't intervened so far in the matter of the interest rate charged by the non-banking financial institutions (IFN) on loans. The statement of the PNL senator came as the Central Bank started a project which would require IFNs to pay ten times more additional capital for the interest loans which exceed certain limits required by the National Bank of Romania. The NBR thinks that a strengthening of the regulations is necessary, given that the volume of loans granted by IFNs has exceeded a critical mass compared to the total loan volume, according to the quoted project.

     The contradictory statements that our governors have made lately have led to the weakening of the leu, says Ionuț Dumitru, the president of the Fiscal Council. The local factors are the ones which are boosting the European currency, he said. "Lately, there have been a number of contradictory discussions, by governors, the latter referring to the 2nd pillar and to the VAT account. Investor perception can not be positive after such statements concerning the economy and taxation. These give investors a feeling of uncertainty, uncertainty and lack of trust".

     Economic analyst Ionel Blănculescu also said that there are global phenomena, "such as the first missile which went over Japan, Brexit and so on", which are based on the exchange rate movements. "The exchange rate is the result of a combination of internal and foreign factors", Mr. Blănculescu says, mentioning that there is a large number of news that can influence investors and can determine them to transfer their money from Romania to other countries. But, in his opinion, we have to know the volumes of traded currency, to see what is really happening, to realize whether this is a serious increase of the exchange rate or a momentary development.

     Erste Group analysts were recently saying that the leu would gradually depreciate, going to 4.62 units for an Euro, in December 2017, influenced by internal factors such as the increase of the current account deficit and the fiscal uncertainties, but the foreign evolutions should not be overlooked. "The tightening of the monetary policy in the United States, together with the political risks in Europe and a possible firmer tone from the European Central Bank (ECB) which could create obstacles for the leu in 2017", according to the Austrian bank. Erste analysts also said: "Lately, the leu has weakened compared to the Euro, as the governor has recently announced that there is no more room for the leu to strengthen, suggesting that a weakening of the currency can be tolerated despite the controlled float regime of the exchange rate. That being said, the NBR could prevent an abrupt depreciation of the leu against the Euro, which is at any rate is somewhat less probable, given the perception of the market that its volatility is very low among the currencies in Central and Eastern Europe".

     NBR governor Mugur Isărescu said, on February 9th, that there is no more room for a strengthening of the leu, and he added: "That's to avoid saying outright that there is no room at all".

     On that occasion, former banker Lucian Isar commented: "The exchange rate and the transactions on it are sensitive to many of the information and statements made in the public sector. One of the statements that the market immediately includes in the price is that of the NBR governor. The euro-leu exchange rate is a managed exchange rate, manipulated by the NBR. Due to the fact that the NBR can intervene with large amounts on the exchange rate, the statement of the NBR governor becomes a certain guidance. The moment when it says that the leu has no more room for strengthening, he is guiding the move towards depreciation without the need for an intervention of the NBR on the exchange rate precisely at that point to lend credibility to the message".

     In response, Mugur Isărescu said, in an interview granted to "Jurnalul Național": "If we are talking about exchange rate fluctuations below 0.1 percent, in fact smaller than a quarter of a ban, only someone who doesn't know what the foreign currency market means could think that such moves could be the result of manipulations! Exchange rates fluctuations of that size are daily, normal, on an active market. I take the positive side of these concerns tied to the depreciation of the exchange rate. And namely that our ban, as a subunit of the leu, has value and even a move of a tenth of a ban matters. As far as the statement in the press conference, what the people who imagine manipulation haven't understood is that I haven't referred to the move of the nominal exchange rate of the leu on the banking market, but to a specific indicator, the real exchange rate, calculated through relation to the nominal exchange rate to the evolution of internal prices and the weight compared to the evolution of internal prices and weighted against the Euro and other currencies used in our foreign trades. In the case presented in the press conference, which is also on the website of the bank, the real exchange has been calculated through comparison to the production prices, because they are the basis of the international price competitiveness. In that place t here is no more room for growth. The effective real exchange rate, as an indicator of the price competitiveness is a notion that any self-respecting economist knows. But I think that in this case we are speaking about economists that aren't self-respecting..."

     Lately, the Euro has been constantly rising compared against the leu, above 4.58 lei, with the highest level being reached on June 21st, when it reached the level of 4.5987 lei.

     The Swiss franc also strengthened against the leu, from 4.0387 lei to 4.0428 lei, while the American dollar dropped from 3.8513 lei to 3.8198 lei. 
EMILIA OLESCU (translated by Cosmin Ghidoveanu)