Daily Newsletter - 19 March 2019


Macroeconomic News (3)

"Romania has the lowest financial intermediation level in the EU"

Romania has the lowest financial intermediation level in the EU, 25.7% compared to the EU average of 83%, according to a speech delivered by Bogdan Belciu, business and management consulting partner at PwC Romania, on Friday.


Total foreign debt down in January

Romania's total foreign debt amounted to EUR 98.38 billion in January, down EUR 817 million from the corresponding month of 2018, according to data released by the National Bank of Romania (BNR) on Monday. At the end of 2018, the total foreign debt was RON 99.2 billion.


Current account deficit up 16-fold

The current account of the balance of payments showed a EUR 114 million deficit in January, 2019, about 16 times higher compared with the EUR 7 million deficit reported for the corresponding month of last year, according to the National Bank of Romania (BNR). The goods trade showed a EUR 1.25 billion deficit, while services showed a EUR 623 million surplus.


Financial News (2)

BNR attracted RON 6.1 billion in deposits

The National Bank of Romania (BNR) attracted RON 6.1 billion in liquidity from 22 banks through its seven-day deposits. This is the first such operation since January. The inter-bank market has been awash with liquidity for the past two weeks. The market responded to BNR's intervention with a surge in the overnight interest rates.


Brick and mortar branch offices are brand materialization

"We cannot ignore certain realities, because not everyone has mobile banking and cards. There are 20-25% of the people whose relationship with the bank goes solely through branch offices." The digitization of banking services is ongoing, and the scale of the phenomenon exceeds any expectations, but the brick and mortar branch office is still needed to provide trust, according to Marian Ignat, executive director of digital banking at BCR.


Investment News (2)

Foreign direct investment up

Foreign direct investment amounted to EUR 362 million in January, an increase of 88.5% year-on-year, according to the National Bank of Romania (BNR). Capital investment (including net reinvested earnings) reached EUR 341 million.


Timis authorities launch EUR 180 million project

A project worth EUR 180 million was signed by Minister of European Funds Rovana Plumb, Aquatim Timisoara CEO Ilie Vlaicu and Timis County Council President Calin Dobra on Monday. The project will see sewerage systems and pumping stations installed in dozens of Timis county communes and towns.


Legislative News (2)

Senate passes bearer shares ban again

Companies will be banned from issuing bearer shares, while those who already hold such securities will have to turn them in within 18 months from the coming into force of the new money laundering bill passed by the Senate on Monday. This was the second time the bill passed the Senate, following a decision to bring it in line with a Constitutional Court's ruling stating that the organizations set up by ethnic minorities cannot be exempted from scrutiny.


Cabinet repeals Decree 114 stipulation

The Cabinet made the first modification of Decree 114 last week, without issuing an amendment and without informing the public. The modification was made by amending a decree from 2017.


Politics (2)

PACT to merge with PNL

Ludovic Orban, President of the National Liberal Party (PNL), announced that the merger protocol between PACT and PNL will be completed in the coming days. The leadership teams of the two parties will then have to vote on the protocol.


Bucharest poll

The Social Democrats (PSD) stand at 26% in the latest poll conducted in Bucharest by CURS. The USR-PLUS alliance is next at 23%, followed by ALDE (19%) and PNL (17%).


Social (2)

Demographic decline worsened

Romania's population continued to shrink for demographic causes. The decline rate picked up speed in January, when 9,867 residents were lost, compared to 6,495 residents in January, 2018, according to data released by the National Statistics Institute (INS) on Monday.


Rabla program to resume on April 5

The Rabla program will be launched on April 5 this year, the 15th consecutive year when the cash-for-clunkers program is held. The first stage of the program involves 30,000 vouchers, which will be supplemented later if the situation requires it.