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October 2, 2022

RON hits new historic low

The exchange rate could surpass the historic low of RON 4.46/EUR that it has reached on the interbank market, but such a depreciation could result in an aggressive intervention from the National Bank of Romania (BNR), an intervention meant to remind market players of the force that the central bank has on the local market, Mediafax informs. The national currency continued to depreciate in the second part of the interbank session on Friday, the quotes standing slightly above RON 4.44/EUR at the end of the day in a market that featured high transfer volumes and in which BNR indirectly intervened in order to limit the RON’s depreciation, according to the dealers. “Going over the recently reached minimum level of RON 4.46/EUR is not ruled out,” Vlad Muscalu, ING Bank Senior Economist, stated. Muscalu added that the current depreciation could result in an aggressive intervention that would once again remind market players of the force that the central bank can have in this relatively small size market. He believes that external players are not worried by the current internal situation, considering the limited size of the fiscal relaxation being considered, but also the relatively solid backing that the new government has in Parliament. At the same time, BCR Analyst Eugen Sinca believes that the RON’s depreciation was caused by internal factors and that Romania should set a series of priorities in order to enhance the degree of attractiveness. The BCR currency exchange estimate for the end of this year stands at RON 4.39/EUR, and the quotes will stabilize around RON 4.4/EUR. UniCredit Tiriac Chief Economist Dan Bucsa states that it is much too early to estimate the maximum level that the quotes will reach in the following period and it has to be seen what the immediate developments will be.

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