The currency in circulation in Romania beat the previous month’s record and reached an all-time high. The amount of currency in circulation was RON1.2 billion higher in November than in October, which is the biggest monthly difference this year.
The currency in circulation is much harder to control compared with electronic payments, which is why it contributes directly to the development of the informal economy.
The Fiscal Council, the institution that monitors the fiscal policy of the government, estimates tax evasion reached 15% of the Gross Domestic Product or RON95 billion in 2013, according to the latest data available. Analysts say that a reason for the high amount of currency in circulation is that most Romanians still prefer to use cash and withdraw all their money from the ATM on payday.
The increase in the amount of currency in circulation is also because payments by card to local retailers are still low compared with other European countries, despite significant growth on the segment lately.
(English version by Loredana Fratila-Cristescu)