Chapter

ROMANIA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
Share
  • ShareShare
Show Summary Details
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: March 25, 1998.
Exchange Arrangement
CurrencyThe currency of Romania is the Romanian leu.
Other legal tenderThe transferable ruble continues to be used as a unit of account for outstanding CMEA balances.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateThe exchange rate of the leu is determined in the inter bank foreign exchange market. The National Bank of Romania (NBR) intervenes in the exchange market to adjust the exchange rate of the leu and to build up foreign exchange reserves. Dealing in the foreign exchange market is subject to NBR authorization. All commercial banks are authorized to participate in the inter bank foreign exchange market. Juridical persons other than authorized commercial banks may purchase or sell foreign exchange through authorized banks. Natural persons may purchase or sell foreign currency either through authorized banks or through foreign exchange offices. The NBR quotes rates for 15 currencies based on the rates for these currencies against the dollar in the countries concerned, and the rates for 11 currencies of the euro zone based on the rates of these currencies against the euro. Foreign exchange offices conduct transactions with banknotes of the above currencies and accept traveler’s checks and cards denominated in these currencies.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThe forward market is underdeveloped.
Official cover of forward operationsn.r.
Arrangements for Payments and Receipts
Prescription of currency requirementsPayments to and from countries with which Romania has bilateral payment arrangements are made only in convertible currencies and in accordance with the procedures set forth in those arrangements.
Payment arrangements
Bilateral payment arrangements
OperativeThere are arrangements with China, the Democratic People’s Republic of Korea, Pakistan, and some previous CMEA members, aimed at liquidating the balance of the CMEA accounts.
InoperativeThere are arrangements with Albania, Algeria, Costa Rica, Egypt, Greece, India, and the Islamic Republic of Iran. On October 10, 1999, a Memorandum of Understanding was signed with the Islamic Republic of Iran in order to liquidate the clearing account.
Regional arrangementsRomania is a member of the CEFTA and has free trade agreements with the EFTA countries, Turkey, and Moldova. Romania is an associated country to the EU.
Clearing agreementsThere are clearing arrangements with Bangladesh and a few countries of the former CMEA, but they are only used to settle previous balances.
Administration of controlThe NBR issues rules and regulations related to the control of foreign exchange transactions, and authorizes certain capital transfers.
International security restrictionsNo.
Payment arrears
PrivateYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeThe NBR has sole authority to purchase or to sell gold in any manner. It may grant permission to certain juridical persons for such purposes.
Controls on external tradeThere are no actual authorizations for conducting external trade.
Controls on exports and imports of banknotesAmounts for the export and import of currency exceeding those detailed below have to be declared at customs and deposited against a receipt. On a further trip to Romania within three years, those amounts may be used; after three years, these are automatically passed to the state budget.
On exports
Domestic currencyNatural persons may take out lei 500,000 a person a trip.
Foreign currencyNatural persons may take out foreign exchange up to the equivalent of $10,000 a person a trip.
On imports
Domestic currencyNatural persons may bring into Romania up to lei 500,000 a person a trip.
Foreign currencyNatural persons may bring into Romania up to the equivalent of $10,000 a person a trip.
Resident Accounts
Foreign exchange accounts permittedThese accounts may be held by (1) juridical persons who are registered in Romania (i.e., public institutions, embassies, consulates, other Romanian representatives abroad); (2) autonomous state agencies, commercial companies, associations, clubs, leagues, and any other profit or nonprofit juridical persons authorized to carry on activities within the Romanian territory; (3) foreign branches, subsidiaries, representatives, and agencies; (4) Romanian citizens; (5) natural persons with foreign citizenship; and (6) stateless persons living in Romania.
Held domesticallyForeign exchange operations among residents are forbidden, except those authorized by the NBR.
Held abroad
Approval requiredResident persons need NBR approval for holding accounts abroad, except the following categories: (1) banks for their activity conducted under the authorization of the NBR; (2) representation, agencies, offices of the Romanian juridical persons, which are not registered as juridical persons abroad, for current expenses necessary to carry out their activities abroad; (3) embassies, consulates, or other representations of Romania abroad; (4) residents legally owning real estate abroad for expenses related to the maintenance and administration of their property; (5) resident natural persons while staying abroad; these accounts may be maintained after their return to Romania; and (6) residents for the amounts which, because of legal obstacles, cannot be repatriated to Romania.
Accounts in domestic currency convertible into foreign currencyFull convertibility is permitted for current account transactions. Convertibility for capital account transactions is limited and requires prior approval of the NBR.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsThe accounts in domestic currency are account type A, B, and deposit accounts: (1) accounts of type A are for depositing proceeds from current transactions, sales and purchases of foreign currency against leu, where the underlying transaction is of a current nature, transfers from B accounts, and interest earned on A and B accounts; (2) accounts of type B are for capital transactions, i.e., sales and purchases of foreign exchange against leu, where the underlying transaction is of a capital nature, proceeds from capital transactions, and transfers to/from A accounts; and (3) deposit accounts with the prior authorization of the NBR.
Convertible into foreign currencyFull convertibility is permitted for current account transactions stipulated by regulations (profits, dividends, interest, and other income sources resulting from legal transactions). Full convertibility is also permitted for most capital transactions of nonresidents in Romania (direct and real estate investments as well as liquidation of those and capital investments), which are freely allowed by law. Convertibility is also assured for all other capital transactions that are subject to authorization of the NBR. The conversion in foreign currencies is carried out provided that nonresidents submit to commercial banks the justifying documents including the authorization of the NBR in the case of deposit accounts. For the balances of accounts of type A, convertibility is permitted, within 180 days starting from the date of encashment. For the balances of accounts of type B and deposit accounts, convertibility is always permitted.
Approval requiredYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsDocumentation is required in the case of all import payments.
OtherYes.
Import licenses and other non tariff measuresImports, in general, are not subject to licensing. The government may restrict imports for reasons of public health, national defense, and state security, in accordance with the provisions of the WTO.
Negative listYes.
Other non tariff measuresThere is a custom’s fee of 0.5% for imports outside the EU, CEFTA, EFTA, and Turkey.
Import taxes and/or tariffsTariff rates range between 3% and 144%, averaging about 19% for all goods on a trade weighted basis. The 6% import surcharge was reduced to 4% on January 1, 1999, and further to 2% on January 1, 2000. It is applied to about 63% of imports.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsResident juridical persons must maintain foreign exchange export proceeds in accounts opened at domestic commercial banks or foreign commercial banks authorized to operate in Romania but are free to use the balances in these accounts. Repatriation must be effected: (1) within 90 days from the goods crossing the border; and (2) within 15 days from the due date that appears in the contract.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesThere are licenses for statistical purposes on certain new materials and low-processed goods.
Export taxesThere is a commission of 0.5% for exports outside the EU, EFTA, CEFTA, and Turkey.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments and transfers must be documented.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsRepatriation must be effected within: (1)90 days from completing the work or rendering the services; (2) 5 days from the due date that appears in the contract; and (3) 15 days from completing the work or rendering the services in the case of advance payments.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsSale by nonresidents is free, whereas issue requires NBR authorization and National Commission for Securities (NCS) approval.
Purchase abroad by residentsThese transactions require NBR authorization.
Sale or issue abroad by residentsThese transactions require NBR authorization.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThese transactions require NBR authorization.
Sale or issue abroad by residentsThese transactions require NBR authorization.
On money market instruments
Purchase locally by nonresidentsThese transactions require NBR authorization.
Sale or issue locally by nonresidentsThese transactions require NBR authorization.
Purchase abroad by residentsThese transactions require NBR authorization, except for banks.
Sale or issue abroad by residentsThese transactions require NBR authorization, except sale of money market securities by banks.
On collective investment securities
Sale or issue locally by nonresidentsSale by nonresidents is free, whereas issue requires NBR authorization and NCS approval.
Purchase abroad by residentsThese transactions require NBR authorization.
Sale or issue abroad by residentsThese transactions require NBR authorization.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsSale by nonresidents is free, whereas issue requires NBR authorization and NCS approval.
Purchase abroad by residentsThese transactions require NBR authorization.
Sale or issue abroad by residentsThese transactions require NBR authorization.
Controls on credit operationsEffective September 10, 1999, all credit operations extended by nonresidents to residents with a maturity exceeding one year were liberalized.
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsThese transactions require authorization, except for commercial banks.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThose related to commercial credits of less than one year maturity or if extended by a commercial bank are free.
To residents from nonresidentsThese transactions are free only if not related to financial credits.
Controls on direct investment
Outward direct investmentThese transactions require NBR authorization.
Inward direct investmentInvestments of more than 5% in banks require NBR authorization.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsThese transactions require NBR authorization.
Controls on personal capital movements
LoansThese transactions require NBR authorization.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThese transactions require NBR authorization.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsThese transactions require NBR authorization only for residents.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Requires NBR authorization for maturities longer than one year.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsInterest rates paid on reserves are different for each currency.
Liquid asset requirementsn.r.
Interest rate controlsn.r.
Credit controlsn.r.
Differential treatment of deposit accounts held by nonresidentsn.r.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsThe authorization of the NBR is required for investments by residents or nonresidents of more than 5% in a bank’s equity.
Open foreign exchange position limitsn.r.
Provisions specific to institutional investorsn.r.
Other controls imposed by securities lawsn.r.
Changes During 1999
Arrangements for payments and receiptsOctober 10. A Memorandum of Understanding was signed with the Islamic Republic of Iran to liquidate the clearing account.
Imports and import paymentsJanuary 1. The rate of the import surcharge was reduced to 4% from 6%.
Capital transactions
Controls on credit operationsSeptember 10. All credit operations extended by nonresidents to residents with a maturity exceeding one year were liberalized.
Changes During 2000
Imports and import paymentsJanuary 1. The import surcharge was reduced to 2%.

    Other Resources Citing This Publication