Moreover, according to Isarescu, the central bank paid profit tax in April for the first time in the past nine years, due to high earnings in the last two quarters.

According to law, the central bank is exempted from paying profit tax, but sends to the state budget 80 percent of revenues remaining after it covers expenses and losses. Practically speaking, the central bank must first cover its expenses and losses and only then, if money is left, it uses this to pay taxes. By the beginning of the fourth quarter of 2008, all previous losses had been covered, and the bank posted a profit for the past three months.

For the first time in the past nine years, BNR succeeded in covering its losses and expenses, and posted a profit. So far, the central bank has used the money to pay losses and expenses and, considering that these were covered in the first nine months of the previous year, the financial institution posted a profit for the remaining period.

“As of last fall, the fourth quarter, and the first quarter of this year, profits were sky-high. We had expected to register a taxable profit at the end of 2009. The law does not allow us to pay profit tax before covering losses on previous years. (…) Losses were covered a few quarters before, what had remained from losses registered in previous years, and in April 2009 we paid profit tax for the first time since 2001. The profit was significant in the fourth quarter of 2008 and the first quarter of 2009, the profit is significant,” Isarescu told the Mediafax news agency.

BNR registered a net profit worth €137.67 million (RON 458.46 mln) in 2007, compared to RON 4.33 bln in loss in the previous year, according to the annual report published by the central bank.

According to Vasilescu, the main source of funds was loans granted to commercial banks. “In the past few years, a lot of money entered Romania from banks that came into our country. And the central bank spent a lot of money to reduce this liquidity flow, to sterilize this money. Practically speaking, it played the part of debtor. Because of this, BNR registered deficit, not loss, in these years. However, in the past few quarters, the central bank directed most of this money to commercial banks, becoming their creditor. Hence, the central bank’s profit,” Vasilescu said.

Another factor which contributed to the profit posted by BNR was foreign currency operations, as analysts on the financial market said that the central bank gained significant revenues from this source also.

Referring to BNR’s future evolution, the financial market is optimistic. “BNR obtained a profit from loans granted to banks and also from foreign currency loans. And, from now on, it will remain on profit for a long time,” said Lucian Anghel, Chief Economist of the Banca Comerciala Romana (BCR) lender.