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The external balance of payments deteriorated sharply in 1990asproductiondeclinedandconsumptionincreased. The convertible currency current account swung into a deficit of US$1.7 billion from a surplus of US$2.6 billion in 1989. Convertible currency foreign exchange reserves werealmostdepleted. TheexpectedctuTentaccountdeficit foreach of 1991 and l992 is expected to be US$1.5 billion. Financial support for the program is expected to come from the official sector, with commercial bank lending likely to be modest The volume of convertible cumrency imports rose substantially in 1990 as the govenment sought to make up for production shortfalls and meet increased consumption demand. Imports of consumer goods jumped by more than 600 percent, and imports of raw materials also rose sharply. The dollar value of total convertible currency imports increased by more than 50 percent from 1989 to 1990, to US$5.1 billion. At the same time, the dollar value of convertible currency exports fell by 42 percent to US$3.5 billion.

The deterioration of the convertible currency current account balance was in part precipitated by the Gulf crisis. lT z dollar value of net oil imports increased from US$250 million in 1989 toalmostUS$ 1.1 billion in 1990. (Romania is an oil producing country).

The convertible currency current account deficit of US$1.7 billion was financed almost entirely by drawing down reserves. Official reserves (excluding gold) fell by US$1.6 billion in 1990 from US$1.9 billion at the end of 1989. No financing was provided by multilateral financial institutions in 1990. About US$40 million came from official bilateral creditors, while some US$100 million of short tern trade credits were repaid to commercial banks. The total net outflow to external creditors seems to have been about US$50 million.

Total external debt was aboutUS$500 million at the end of 1990, little changed from 1989. Most of the debt consisted of short tenn trade credits, with P-out 40 percent of the total owed to commercial banks. Jfficial reserves amounted to abo_. US$200 million, equivalent to about two weeks of imports.

Totalexternal financingcommitmentscouldreachabout US$2.1 billion for all of 1991. Most of the new money would come from multilateral lenders. The majority of the inflows from bilateral creditors are likely to be in the form of government guarantees of suppliers'credits. According _Table 14:_ Romania: External Debt (in US$ million)

||L98|1987|12Q|129|199|12291|1922|
|---|---|---|---|---|---|---|---|
|Convertible Currency||||||||
|External Debt|6,592|6,859|2,798|582|518|2,151|3,794|
|of which MLT|5,649|6,063|2,605|269|167|1,166|2,785|
|ST|943|796|193|313|352|985|1,009|
|By Creditor||||||||
|IFIs|2,672|2,670|905|0|0|1,059|2,238|
|Bilateral|1,483|1,945|1,257|284|266|513|740|
|Commercial Banks|2,334|2,144|536|248|252|451|570|
|of which MLT|1,615|1,765|441|1|0|20|45|
|ST|719|379|95|247|252|431|525|
|Other Private Creditors|103|100|100|50|0|128|247|
|Reserves excl. Gold|582|1,402|780|1,859|524|838|1,177|
|DepositsinBISBanks|638|1,387|811|1,843|584|||

Source: mI, Country Report dated, November 20, 1991 23