ADVERTISEMENT

Ukrainian Refugees Boost Demand for Euro Banknotes in Romania

Ukrainian Refugees Boost Demand for Euro Banknotes in Romania

Romania’s central bank asked lenders to increase their physical cash holdings of foreign currency due to increased demand for mostly euro banknotes from an unprecedented number of people fleeing the war in neighboring Ukraine.

As more than 250,000 refugees have entered Romania since the Russian invasion of Ukraine two weeks ago, banks and exchange offices in the capital Bucharest and other towns and cities in the north and the east of the country have been facing euro cash shortages, according to central bank spokesman Dan Suciu. 

“It’s not a problem of banking system stability or anything else of the sort, it’s purely a problem of logistics which we hope will be solved in the coming days,” Suciu said by phone on Monday.

While banks are regulated and will organize transports to bring in more cash this week, according to Suciu, the private exchange offices, which rely only on the supply and demand from citizens, have increased the exchange rate to as much as 5.3-5.4 lei per euro compared with 4.95 lei on the interbank market. 

©2022 Bloomberg L.P.