The Open Foreign Exchange Position is compiled according to the Regulation "On the bank's Open Foreign Exchange Position" No. 126 as of 28.11.97.
Open Foreign Exchange Position - foreign exchange account balances (that represent bank's balance-sheet foreign currency assets and liabilities in the corresponding foreign currencies and off-balance-sheet commitments related to foreign exchange buying/ selling transactions), which leads to potential gains or losses due to exchange rate fluctuations.
Open Foreign Exchange Position is long when the amount of balance-sheet assets in the corresponding foreign currency as well as the off-balance-sheet commitments to purchase this currency, exceeds the amount of balance-sheet liabilities in the corresponding currency as well as the off-balance-sheet commitments to sell this currency.
Open Foreign Exchange Position is short when the amount of balance-sheet liabilities in the corresponding currency as well as the off-balance-sheet commitments to sell this currency exceeds the balance-sheet assets in the corresponding foreign currency as well as the offbalance- sheet commitments to purchase this currency.
The open foreign exchange position ratio represents the percentage ratio between the amount of open foreign exchange position (in Moldovan Leu) and the amount of the commercial bank's total regulatory capital.
In order to diminish the commercial bank's foreign exchange risks, the National Bank of Moldova has set up the following limits for the open foreign exchange position ratios:
a) the ratio of long open foreign exchange position for each corresponding currency should not exceed "+10%",
b) the ratio of short open foreign exchange position for each corresponding currency should not be less than "-10%",
c) the sum of all the ratios of long open foreign exchange position for each corresponding currency should not exceed "+20%",
d) the sum of all the ratios of short open foreign exchange position for each corresponding currency should not be less than "-20%".
The information published monthly on the official NBM web site includes aggregate data denominated in Moldovan Lei on certain items of foreign exchange assets and liabilities of the authorized commercial banks: assets - bank notes, correspondent accounts, time deposits, overnight deposits, securities, loans, and forward purchases; liabilities - sight deposits, time deposits, and forward sales. Note: beginning with August 2004 the data are presented as following: assets - bank notes, correspondent accounts, time deposits, overnight deposits, securities, loans granted in foreign currency, reserve requirements in foreign currency, other balance sheet assets, forward purchases, and other off-balance-sheet assets; liabilities - foreign bank's foreign exchange correspondent accounts, foreign bank's foreign currency time deposits, client's time deposits, client's sight deposits, loans received in foreign currency, other foreign currency liabilities, forward sales in foreign currency, and other foreign currency off-balance-sheet liabilities. The data is presented in absolute value at the end of the month, daily average for the reporting month and as weights in the average daily figures.
The open foreign exchange position is provided in Moldovan Lei in absolute value at the end of the month, daily average for the reporting month and as weights in the average daily figures for the most frequently traded currencies and namely: US dollar, Euro, Russian Ruble, Romanian Leu and other currencies.
The open foreign exchange position ratio is provided in percents at the end of the month and daily average for the reporting month for the most frequently traded currencies and namely: US dollar, Euro, Russian Ruble, Romanian Leu and other currencies.
Open Foreign Exchange Position is published on the 30-th of each month following the reporting month.