Exchange rate reaches new minimum – 4.3958 RON/EUR

The exchange rate posted yesterday by the National Bank of Romania (BNR) dropped by RON 0.014, to 4.3958 RON/EUR, a new minimum of the last 10 months, with intense activity in the interbank market and, according to Mediafax, dealers believe that the Central Bank directly intervened in the market, buying EUR, in order to temper the appreciation of the RON. BNR has not announced a lower exchange rate since 30 July 2013, when the reference rate was 4.3907 RON/EUR. For the American currency, BNR posted Tuesday a rate of 3.2206 RON/USD, down RON 0.01. The Swiss franc is quoted by the Central Bank at RON 3.5972, down RON 0.014, the lowest level in the last 6 months and a half. After the minimum was attained, several EUR buy orders were placed in the market, which partly tempered the appreciation of the RON, and dealers say that was the moment when BNR started directly intervening in the market, to slow the strengthening of the Romanian currency. According to analysts quoted by Bloomberg, quoted by Mediafax, the appreciation of the RON was mainly driven by the decision of Standard & Poor’s agency to improve the rating of Romania to the investment grade category, recommended for long-term investments.
“One of the most uneventful sessions this year took place yesterday (Monday), with the RON strengthening to a value near 4.40 RON/EUR, in line with our anticipation for an advance of the RON against the background of a strong result obtained by the socialist government in the elections for the European Parliament. However, we believe that around the mark 4.40 RON/EUR the potential for currency interventions increases, as suggested by the increase of volumes that accompanied the advance of the RON last year. Taking into consideration the past pattern and the comments of BNR that hint to the fact that the Bank does not believe there are sufficient fundamental motives for supplementary gains of the RON, we continue to believe that the RON has a limited strengthening potential beyond 4.40 RON/EUR”, ING Bank analysts mention in a note made public Tuesday.

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