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Some analysts consider that, by using the expression “adequate management of liquidities,” the BNR transmitted during the monetary policy session of Monday the idea that it will allow a moderate devaluation of the RON.
The National Bank of Romania (BNR) yesterday posted a reference exchange rate which decreased by 1.17 ban (RON 0.0117), to 4.4106 RON/EUR, representing a minimum after the end of April 2012. A lower exchange rate than Tuesday was announced by the Central Bank on April 30 (4.3970 RON/EUR). In the previous session, the reference exchange rate was 4.4223 RON/EUR. The Romanian currency significantly appreciated Monday just before the end of the trading session, and dealers believe that the move was probably generated by sell orders in EUR placed by foreigners which invested in bonds sold by the Ministry of Finance. For the American currency, the Central Bank posted an exchange rate of 3.3608 RON/USD, 3.09 ban (RON 0.0309) down from 3.3917 RON/USD Monday. The reference exchange rate of the Swiss franc decreased from 3.6583 RON/CHF to 3.6474 RON/CHF. This is a new minimum after 27 April 2012, when the Swiss currency was quoted at RON 3.6416. The session opened with an EUR trading at RON 4.4050 – 4.4065, very close to the quotations registered Monday, around 4.30 PM, of 4.4050 – 4.4120 RON/EUR. Later, quotations picked up towards 4.41 RON/EUR. The analysts of ING Bank believe that an appreciation of the Romanian currency under 4.4 RON/EUR could be boosted by the continuation of foreign investments in RON-denominated state bonds during the tender scheduled for Thursday, with 3-year bonds. The interests posted Tuesday by commercial banks for sums attracted (ROBID) and placed (ROBOR) for 1-day intervals decreased from 5.33 – 5.83 pc a year to 5.31 – 5.81 pc a year. Meanwhile, the annual interests charged for one-week loans dropped from 5.41 – 5.91 pc to 5.37 – 5.87 pc.Coming to the Central Bank’s message sent Monday through its decision to keep the key interest and cash reserve ratio unchanged, the key expression of the session was “adequate management of liquidities” instead of “firm management of liquidities.” According to brokerage company Admiral Markets, BNR sent a veiled, but very clear message in the market – the RON will be allowed to moderately depreciate, capital.ro reports. “In the second part of last year, the RON was subject to significant devaluation pressure (the quotation exceeded RON 4.6 for one EUR). The Central Bank intervened in the market, but it did not use the classic instruments – interests and CRR – and instead it lowered the liquidity by limiting some inter-bank operations (REPO), which led to the expression <firm management of liquidities.> By renouncing this expression, BNR sends the message in the market that it will make more RON available, allowing some modest depreciations,” the analysts of Admiral Markets believe. They estimate that, because of the current economic context and international climate, plus the message sent by BNR, the general trend for the RON is devaluation against the EUR and USD. For the time being, there is still little interest from speculators, but analysts estimate that, in the coming weeks, the key support threshold 4.4 will once again become attractive for buyers.