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The appreciation of the national currency comes after the Morgan announced inclusion of Romanian bonds in the bank index for emergent market government bonds from March 1, analysts say.
The RON experienced a notable appreciation on Wednesday, the reference rate published by the National Bank of Romania (BNR) dropping to RON 4.3364/EUR, the lowest level in the last 12 months. A lower rate – 4.3340 – had only been recorded on January 30, 2012. During the previous session, the exchange rate was 4.3894, which makes Wednesday rate smaller by 5.3 bani. The central bank also announced a decreasing exchange rate for the US dollar – lower by 2.86 bani – at RON 3.2596/USD, representing the minimum since February 29, when the dollar was worth RON 3.2357. At the same time, the official exchange rate for the Swiss franc decreased to RON 3.5061/CHF, the lowest since December 2011, when the Swiss franc was rated 3.5037 units. JP Morgan said Tuesday night it would include on March 1 Romania’s bonds in its index for emergent markets government bonds. The information prompted an appreciation of the RON on international markets right after the announcement was made. Romania’s bonds prices rose Wednesday at the highest level in two years. Government Bonds Index – Emerging Markets operated by JPMorgan includes bonds worth USD 175 billion and Romania’s share will be 0.54 percent, after the first phase.‘Although the inclusion is not a final fact yet, the news did confirm expectations supporting the recent rise of assets denominated in RON. (…) In our opinion, the central bank contained the appreciation of the RON by some major interventions yesterday (Tuesday – a/n) and we believe it will continue to increase its forex reserves, which will prevent a clear appreciation beyond RON 4.30/EUR in the coming period’, an ING Bank report says. The bank analysts say the natural demand for foreign currency combined with potential official interventions done for rebuilding BNR’s forex reserves will slow down the RON appreciation trend. The interest rates used by banks for money attracted (ROBID) and placed (ROBOR) overnight were from 5.52 to 6.02 per cent, while one week yields were 5.51-6.01 per cent.