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October 17, 2021

Romanian exports favoured by strong EUR

In recent months the exchange rate has varied within the RON 4.2 – 4.3/EUR margin because the RON’s evolution is very dependent on the EUR’s evolution, Gandul.info informs. Thus, economic analysts consider that the EUR’s depreciation against the USD has left its mark on RON’s overall exchange rate. “A depreciating EUR is not good for Romania. The RON is growing stronger and then we’ll have problems exporting,” economic analyst Ilie Serbanescu stated. “Our great advantage is that we buy raw materials with USD and our exports are EUR-denominated,” he added.

Since the start of 2010 until now the RON’s exchange rate grew by 9 per cent from RON 2.94 to RON 3.2/USD. In what concerns the RON’s current exchange rate and its recent evolution, Serbanescu claims that the recent appreciation cannot be a reason for joy. “It’s a great tragedy. All artificial developments are bad. Instead of being 4.28 it should be 4.4. BNR did not sell nor did it buy from the market.”

Nevertheless, Adrian Vasilescu, advisor to the Governor of the National Bank of Romania (BNR), claims that the inflation rate could drop by half this year after quickly growing to an 8 per cent level. Moreover, the National Bank’s reserves have grown by EUR 4.13 bln to EUR 32.43 bln in 2010. Its gold reserve stood at 103.7 tons, its value however dropping from EUR 3.522 bln in November to EUR 3.518 bln in December because of the fluctuations in the price of gold.

On the other hand, the world’s great powers, particularly the US, EU and China, will continue their trade wars through currency manipulation, Nouriel Roubini, professor of economics at the New York University, warns. Economic recovery, mostly export-driven, is the stake of these wars. A weaker EUR for example favours EU exports, with Germany, the Union’s biggest economy and exporter, standing to gain the most. For the US however a too powerful USD against the backdrop of a weaker EUR could considerably slow down the foreign capital flow that it badly needs.

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