Speaking at a news conference, Isarescu said the central bank used three main buffers to cushion the effects of the capital movements, namely a controlled currency exchange, using the bank’s foreign currency reserves to support the leu and allowing a certain variation of interbank rates.
“Considering the size of the capital inflows and outflows in Romania, we had to use all three available buffers simultaneously. Had we left the leu move freely, the exchange rate would have probably ranged between 4 and 5 lei per euro,” Isarescu said.
“Therefore, we sought to limit the exchange variations arising from these capital movements.”
The central bank’s foreign currency reserves were also used to help reduce the leu’s fluctuations against the euro, Isarescu said.
“As you might have noticed, there have been fluctuations in the foreign currency reserves as well. Last month alone, the forex reserves increased by more than one billion euros,” he added.