The Romanian leu (RON) is a fully convertible currency for both current and capital account transfers related to trade, personal money transfers to Romania or from Romania, or investment. Similarly, Romanian overseas money transfers related to profits, capital gains, or imported goods used in local manufacturing are unrestricted.
Romania’s foreign exchange controls are governed by its membership of the EU, and so are minimal. Since instituting capital account convertibility in 2005, its foreign exchange system has been fully liberalised and the RON floats freely, albeit with occasional intervention by the central bank.
Even though nationals and foreigners may hold foreign currency accounts, residents are not usually permitted to use foreign currency in domestic transactions. They are, however, allowed to use foreign currency to make external payments, although banks will require specific documentation and all transfers between resident and non-resident accounts exceeding the equivalent of EUR50,000 must be reported to the central bank within 20 days of the end of the month.
There are no limits on the amount of hard currency that travellers may bring in or out of the country at a time, but any amount equivalent to EUR10,000 or more must be declared to customs authorities.
The National Bank of Romania (Banca Naţională a României, BNR) sets national monetary policy, oversees the banking sector and other financial service providers, and works to maintain price stability and healthy levels of foreign exchange reserves.
Romania joined the European Union in 2007, but has not yet joined the eurozone. Its national currency, the Romanian leu (RON), is held on a managed float. The leu is benchmarked to the euro, and the central bank seeks to keep its value stable by meeting inflation targets and intervening in the money markets in the case of rapid, potentially disruptive price shifts. The leu’s value dropped to a record low in July 2012 (4.56 leu to the euro) as a protracted dispute among the government raised investor concerns, but the currency has since stabilised. The BNR set an annual inflation target of 2.5% in 2014.
BNR officials indicated in 2014 that as the regional economy begins to improve, Romania will plan to join the EU banking and currency zone once the accession criteria are in place. The government has adopted January 2019 as the date to join the euro (having postponed it from 2015), although the governor of the NBR has said that even more time may be needed to meet convergence criteria. Romania seems to have benefitted from maintaining its cheaper national currency throughout the eurozone crisis, which helped to attract investment from flagging eurozone economies and make cheaper Romanian exports more competitive.
Successive governments have sought to boost foreign direct investment (FDI), announcing EUR600m in state aid in 2014-20 to encourage foreign companies to come to the country.. Since joining the EU in 2007, the country has reformed its legal framework in accordance with European free market principles. Although the implementation of some regulations and FDI incentives has been slow or inconsistent, foreign investment has nonetheless expanded considerably in recent years.
There are no constraints on foreign participation in commercial enterprises, and Romanian legislation applies the same conditions to foreign investors as domestic firms. Investors are permitted to convert 100% of after-tax profits to foreign currency and transfer them abroad freely.
Romania enjoyed solid economic growth in the decade leading up to the beginning of the global economic downturn in 2008, supported by strong foreign capital inflows. Romania’s economy struggled alongside its European neighbours in the last five years, but by 2013, its public debt ratio was the fourth smallest in Europe, at 38.4% of GDP. Nevertheless, with economic activity in the EU remaining weak, Romania is likely to suffer accordingly given that some 70% of exports go to Europe.
The Romanian leu (plural: lei), is divided into 100 cents, or bani. The central bank issues banknotes in values of 1, 5, 10, 50, 100, 200 and 500 lei, and coins in values of 1, 5, 10 and 50 bani.
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