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Romania’s C-Bank Says Eases Reserve Requirements on FX Liabilities

Nov 16, 2009, 6:05:26 PMArticle by Sabina Kotova
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BUCHAREST (Romania), November 16 (SeeNews) – Romania’s central bank said on Monday it would cut the minimum reserve requirements ratio on foreign currency-denominated liabilities with residual maturities of up to two years to 25% from 30% to guarantee proper domestic financing to the public sector. 

Romania’s C-Bank Says Eases Reserve Requirements on FX Liabilities

"Given the delayed external inflows, ensuring a proper financing of the government sector borrowing needs from domestic market resources in the last part of 2009, while preserving the macroeconomic equilibrium, requires adequate financing conditions in the Romanian banking system," the central bank, BNR, said in a statement.

The cut will apply from the November 24-December 23 reserves maintenance period.

Earlier this month the International Monetary Fund (IMF) suspended Romania’s economic review under a stand-by loan agreement and postponed its third loan tranche until the political situation in the country stabilises. The European Commission also delayed the disbursement of a second one-billion euro tranche of aid to Romania earlier this month.

Political uncertainty has been high in Romania since the fall of the country's minority government in October. Romania signed a 20 billion euro ($30 billion) funding arrangement with the IMF, the European Union and the World Bank in March to support its crisis-hit economy.

The decision also aims to gradually align the minimum reserve requirements ratios to European Central Bank standards, the central bank added.

($ = 0.6672 euro)

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