Radio România Internațional

Tag: national currency

  • February 9, 2020 UPDATE

    February 9, 2020 UPDATE

    GOVERNMENT – Prime Minister designate Ludovic Orban announced he would submit, on Monday, in Parliament the list of ministers and an updated governing program with a view to starting procedures for swearing in the new government. The announcement came after President Klaus Iohannis designated the Liberal leader to from a new cabinet. The decision was made after the first Orban government was dismissed on Wednesday through a no confidence motion initiated by the main opposition party, the Social Democratic Party, following the government’s decision to take responsibility for a bill on returning to the two-round voting system for local elections, only a few months ahead of the elections. The Romanian president also reiterated his opinion that holding early elections was the best option for Romania at the moment. Interim Social-Democrat leader Marcel Ciolacu announced his party on Monday will notify the Constitutional Court over Orban’s second appointment, after just being removed from office. To call early elections Parliament must reject two consecutive proposals of Prime Minister designate.

    MERGER – The leadership of Save Romania Union, the 3rd largest party in the Romanian Parliament and of PLUS, led by the former Prime Minister and European Commissioner Dacian Ciolos, met on Saturday in separate meetings to decide on a merger. The two parties will next agree on the conditions. Following internal elections called at the initiative of the Union president Dan Barna, 91% of the Union members voted for their party to be positioned on the center-right side of the political spectrum. Elected on common lists, Save Romania Union and PLUS MEPs are affiliated to the Renew Europe centrist group in the European Parliament.

    CURRENCY – Financial experts report an upward end-of-week trend for the national currency, apparently unconnected to the instability caused by the demise of the Government. The Leu has gone up on Thursday and Friday, and it now sells at 4.76 against a Euro. National Bank Governor Mugur Isarescu believes investors have grown accustomed to political uncertainty, and the reason beind the appreciation is the lack of market liquidities. At this time of the year, both companies and the population are paying their due taxes, therefore the Finance Ministry accounts report surplus revenues, money which is taken out of circulation. The National Bank on Friday decided to cut back on the minimum reserves for currency liabilities from 8 to 6%. Commercial banks will therefore see their hard currency reserves reduced, the equivalent of a little over half a billion euros, financial experts say.

    IAEA – Foreign Minister Bogdan Aurescu on Monday will co-preside the ministerial meeting of the International Conference for Nuclear Security, held under the aegis of the International Atomic Energy Agency. The Conference is held every three years. Co-presiding alongside Romania this year is Panama. Both states are managing the negotiation of the Ministerial Declaration to be adopted on this occasion. The Conference, venued in Vienna, will also include a scientific and technical section, where Romania will also be represented. On the sidelines of the conference, Minister Aurescu will hold bilateral meetings with the Director General of the IAEA Rafael Grossi and the OSCE Secretary General, Thomas Greminger.

    TOURISTS – Over 12.8 million foreign tourists crossed Romania’s borders in 2019, up by 9% compared to 2018, the National Statistics Institute reports. Nearly half of them originated from EU Member States, 90% of whom were from continental Europe. The largest share of foreign tourists was represented by tourists from neighboring Moldova. Compared to 2018, Romania reported a growing number of arrivals from Africa, America and Australia. Road transport was the most frequent choice by foreign tourists to reach Romania, although rail and naval transport have also gone up by 10% compared to the previous year.

    (Translated by V. Palcu)

  • Conversion of Swiss franc loans, ruled as unconstitutional

    Conversion of Swiss franc loans, ruled as unconstitutional

    The law allowing borrowers to switch from Swiss francs to lei at the exchange rate valid on the date the loan contract was signed is unconstitutional, the Romanian Constitutional Court ruled on Tuesday. The Court President, Valer Dorneanu, said the most important aspect taken into account was a severe violation of the principle of bicameralism.



    Valer Doneanu: “The fact that the Chamber of Deputies, the lower chamber in Parliament, is the decision-making body in this case, does not mean that it may endorse a bill in any form they like. On the contrary, Deputies are bound to take into account the text endorsed by the higher chamber, namely the Senate. Furthermore, the Court found that the solution chosen by the Chamber of Deputies, that is, the conversion of Swiss francs to lei at the exchange rate valid at the time when the loan contracts were signed, is wrong and comes against all European directives.



    The Constitutional Court had postponed its decision twice already, in order to look more deeply into the matter. In October 2016, the Chamber of Deputies decided in a bill that loans taken out in Swiss francs should be swapped for national currency loans at the exchange rate valid when the contract was signed. The law was quickly brought before the Constitutional Court by the Government, and Dacian Ciolos, the Prime Minister in office at the time, explained that the Government had done that not because it opposed it, but rather for clarifications.



    According to central bank data, in January 2015 there were over 65,000 borrowers in Swiss francs in Romania, and by June nearly half of them had requested a conversion or rescheduling of their loans, as currency fluctuations had doubled their repayment amounts. At present, the Swiss franc accounts for roughly 4.2 lei, as compared to 2-2.5 lei in 2007-2008, when most of the Swiss franc loans were taken out. Swiss franc lending was encouraged at the time by the much better interest rates than the ones charged on loans in Euros or USD.

  • January 4, 2016 UPDATE

    January 4, 2016 UPDATE

    COLD WEATHER – The wave of cold weather which is sweeping the region has hit Romania, where temperatures dropped to minus 16 degrees Celsius. Three people died from the cold and scores have been hospitalised with hypothermia. Bucharest authorities decided to start offering hot tea and hot soup to the homeless. Snow has disrupted road traffic in the south and south west of the country and rendered air traffic difficult. Speed restrictions have also been imposed in places and many trains have failed to arrive on time. Several ports on the Black Sea Coast have also been closed down.



    CURRENCY – Romanias national currency, the leu, will this year maintain its stabilization trend against the Euro, but it will slightly depreciate against the US dollar. The forecast was made by the Financial – Banking Analysts Association in Romania, according to which the national currency will be mostly influenced by external factors. The President of the Association, Radu Craciun, has said that, although Romanias perception at international level is very good, the leus exchange rates will very much depend on the dynamics of the volatile currency markets. On the other hand, he has warned that certain promises made in the run-up to the 2016 local and legislative elections might raise worries among the foreign investors, and this could impact the evolution of the exchange rate.



    MOLDOVA– The Prime Minister Designate of the Republic of Moldova (a former Soviet state with a predominantly Romanian speaking population), the technocrat Ion Sturza, could not ask for a vote of confidence in Parliament on Monday because of a lack of quorum. The Sturza cabinet had however stood slim chances to get Parliaments endorsement, because the Prime Minister Designate failed to secure the needed 51 votes in order to take office. We recall that on December 21, the President of the Republic of Moldova, Nicolae Timofti, designated Ion Sturza, a businessman and former Prime Minister in 1999, for the position of Prime Minister, in the absence of a parliamentary majority willing to assume responsibility for the new cabinet. If President Timofti nominates a new candidate for the position of Prime Minister, who fails again to get Parliaments endorsement, the Moldovan President will be forced to dissolve Parliament and to call snap elections. The former cabinet, led by Liberal Democrat Valeriu Strelet, was sacked on October 29, under a no-confidence motion filed by the pro-Moscow left and voted by the Democratic Party.



    SEVERED DIPLOMATIC TIES – The EU and the US have launched an appeal for calm after Saudi Arabia, a country with a majority Sunni population, severed diplomatic ties with Iran, a country with a predominantly Shia population. The EU calls on the two sides to show restraint and responsibility, and the US Department of State said diplomatic relations are instrumental in solving differences between the two sides. Saudi Arabia cut diplomatic ties with Iran, after its embassy in Tehran was stormed by violent protesters, discontent with the execution by the Riyadh authorities of Shiite cleric Nimr al-Nimr. Sheikh Al Nimr, a harsh critic of Saudi Arabias ruling Sunni dynasty, was accused of terrorism, conspiracy and breaking the oath of allegiance to the sovereign.



    REFUGEES– The Swedish authorities, overwhelmed by the huge inflow of migrants, on Monday instated new controls on the border with Denmark, France Presse reports. Everybody who crosses the Ostersund Bridge, which is the main gateway used by the refugees, must present an ID. The measure also applies to those who come on board ships departing from the Danish and German ports on the Baltic Sea. Sweden, where over 20% of the residents are of foreign origin, received over 160,000 refugees in 2015 alone. In turn, Denmark on Monday temporarily introduced controls on the border with Germany, to prevent the entrance of migrants without valid travel papers.


    (Translated and edited by Diana Vijeu)