The demand for cash in foreign currency went up over the last days

The demand for foreign currency cash has grown over the last days, but the situation is not worrying for the commercial banks, their representatives mentioning that the units and the ATMs has enough liquidity.So, Bogdan Neacsu, the chairman of the Romanian Association of Banks and general manager of CEC Bank stated that over the last dyas, in the contex of the conflict in Ukraine, there was an increase in the demand for cash foreign currency, but this is not a situation to be worrying. He says that there were doubles of the volumes against the daily average, at the beginning of the week, and growth, especially in the North and Eastern part of the country, close to the borders, but the situation calmed down in the last days. The majority of exchanges were for small sums, namely 1,000 – 2,000 euro.‘Our banking system is solid and can face the challenges. The solvability indicator at system level is over 22%, twice and a half more the legal limit. The banks are ok and the liquidity as well: the liquidity level was at the beginning of the year over 250%, the double against the minimum legal. Namely, the banks have resources which they can mobilise very quickly. I think this is a temporary situation and there is no reason to worry. The system functions and they bring money to the untis. There is a whole logistics behind the counters – from transport between the headquarters and the regional centres, up to the cash foreign currency import mechanisms – which function without any problems. Money is brought in by plane as well” Bogdan Neacsu said.According to the quoted source, by comparison to 2020, when the international transport was affected by the pandemics and the restrictions, now, the logistics system works and money can be brought in the country to cover the pick of demand. Austria and Germany are the countries from which, traditionally, we have such operations.The BCR representatives say that the volume of cash withdrawals is slightly growing.’BCR is prepared to support with the necessary cash and offer active support to the counties around the Romanian border with Ukraine. Along the last five days, supplementary teams acted to ensure the supply of ATMs, so that the ATM zone be completely functional, 24/7’ the BCR representative said.   Up to now, at the banks terminals there were over 27,000 tradings made by the Ukrainian citizens, worth 2.1 million lei. Out of them, 12,000 were withdrawals from ATMs.‘BCR was the first bank to offer to the Ukrainian citizens who get to the Romanian territory the possibility to change Ukrainian money into Romanian lei in the BCR units, in the limit of 2,000 lei to the people with Ukrainian passport, but we mention the recommendation that they use the cards in tradings to prevent any linguistic problems. We hope that all entities take this example. Similarly, there are zero costs to the POS tradings and ATMs with cards issued in Ukraine, as well as zero commissions for the Ukrainian citizens who have top-up actions in the George app or have intra and inter banking payments’ the bank press release says.According to the BCR representatives, the Romanian banking system has no financial direct connections with Russia or Ukraine. The banking system in Romania is very well capitalized (the solvability indicator at 22.26% against the minimum level of 8%) and has enough money (the report between the loans offered and the deposits drawn from the clients is at 68.79%), according to the BNR data for the end of 2021.They mentioned that we will have pressure of depreciation on the ley, fed by the foreign imbalance and the growth of prices for imported raw materials, but they expect a limited and gradual evolution, in line with the trend over the last years. This trend of depreciation, will be, probably, counteracted through higher interbanking interests, as a result of the strict control policy of the liquidity.‘We expect an exchange rate euro/leu at the end of year at 5.05. We see an average depreciation of under 2% of the leu against the single currency of this year, inferior to the difference of rate of interest between the leu and the euro. At the same time, the foreign currency reserves of Romania are adequate and we expect to increase as a result of the inflows of European money’ the BCR representatives said.   In their turn, the representatives of the Transilvania Bank said that they will observe a trend to keeping the money under the form of cash.‘In a period of crisis, people have the tendency to ensure a cash reserve. This is what is happening now – more withdrawals of cash in lei and euro – as we noticed at the beginning of the pandemics. The requests of cash are not significantly higher than a normal period, especially as there was a period with salaries inflow/outflow in one or two days of this interval. The Transilvania bank has no limit to the euro withdrawal’ the representatives of Transilvania bank said.