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June 26, 2022

Strongest RON in last 11 months

Yesterday the National Bank of Romania (BNR) posted a reference exchange rate of RON 4.1685/EUR and of RON 2.9428/USD. The BNR exchange rate dropped by RON 0.0335 to RON 2.9090/USD. It was the lowest exchange rate since the one reported on January 25, 2010 (RON 2.9079/USD). In the first hour of the interbank trading session on Tuesday the national currency’s quotation had a downward trend, the exchange rate dropping to a low of RON 4.1480/EUR, a development that was in line with those seen at regional level.

The first transfers were closed at RON 4.1590 – 4.1600/EUR, a level slightly lower compared to Monday’s closing when the banks were exchanging a EUR for RON 4.1600 – 4.1608. Subsequently the exchange rate continued to drop, reaching RON 4.1480 – 4.1490/EUR at 10.10 AM. The reference exchange rate dropped by RON 0.0246 compared to Monday’s RON 4.1685/EUR level. A lower exchange rate (RON 4.1352/EUR) was posted by the Central Bank on May 4.

“The RON will continue to grow stronger throughout 2011, up to an exchange rate of RON 4/EUR in December,” JPMorgan analysts consider, being quoted by Money.ro. This is the most optimistic prognosis for this year. ING Bank’s prognosis is taking into account an exchange rate of RON 4.2/EUR towards the end of the year. Erste Bank estimates an exchange rate of RON 4.2/EUR in March and RON 4.15 this summer. Raiffeisen Bank foresee a stable evolution somewhere around RON 4.2/EUR.
In the opinion of experts quoted by Money.ro, the RON’s appreciation has to do with BNR’s interventions, the latter trying to keep the inflation rate under control through the exchange rate, and with the speculations of those that sense the institution’s strategy and place short-term bets on the RON in order to benefit from the market’s relatively high interest rate. Economic analysts claim that RON’s appreciation does not represent a sign of economic recovery. A clue concerning BNR’s interventions is represented by the EUR 620 M drop in its reserves in February.

Likewise, a market dealer stated for HotNews.ro that this appreciation shows that the RON was “excessively sold in the past and now a rebalancing is taking place and the fact that it disconnected away from regional currencies supports this statement.” He also pointed out that the fact that the RON has entered a downward trend has stimulated the players to open “short” positions.


The U.S. dollar fell against most of its major currency counterparts on Monday’s trading session. According to WSJ, the dollar dropped about 80 pips vs. the euro and the EUR/USD pair was trading above the 1.4200 level, hitting a 4-month high. The euro also saw a 100 gain against the Japanese yen. The dollar also fell about 100 pips vs. the British pound. The dollar’s fall was also driven by the surge of the euro. Demand for the 17-nation currency steadily increases on bets that the European Central Bank will hike rates in April from a record low of 1.00 pc. The US Federal Reserve (Fed) on the other hand is likely to maintain its relatively loose policy, which in turn weakens demand for the greenback.

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