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February 4, 2023

BNR reference rates for EUR and USD, new record levels

Cause behind RON’s depreciation still unknown. Some analysts blame it on the external markets’ situation, others on internal politics, while some note that the Central Bank is no longer fighting this trend.

The RON continues to depreciate, the RON/EUR reference exchange rate posted on Friday reaching a new historic high of RON 4.5495, while the official exchange rate for the USD climbed to RON 3.7274/USD, also a record level, Mediafax informs. Friday’s exchange rate shows that the RON dropped by 5.32 per cent against the EUR compared to the end of last year. The last exchange rate of 2011 stood at RON 4.3197/EUR. Against the USD, the RON dropped by 11.62 per cent, down from an exchange rate of RON 3.3393/USD at the end of December last year. The RON’s depreciation against the EUR also influenced the official RON/CHF exchange rate which climbed from RON 3.7685/CHF to RON 3.7883/CHF. This represents a new historic high in the last ten months. A higher official rate was last registered on September 5, 2011, back when it stood at RON 3.8133/CHF.On Friday the exchange rate climbed to RON 4.57/EUR, a new historic high on the interbank market, as a consequence of the players’ risk aversion against the backdrop of political tensions in Romania, after which the rates dropped around RON 4.5550/EUR because of the National Bank of Romania’s (BNR) intervention. At the end of the interbank trading session the national currency remained on slight depreciation, the rates remaining above RON 4.5650/EUR in a growing liquidity market in which the Central Bank continued to intervene in order to stabilize the exchange rate. Around 4.30 PM the banks were using an exchange rate of RON 4.4650-4.5680/EUR.

Prices affected by exchange rate vulnerability


Vlad Muscalu, ING Bank senior economist, considers that the different answer that BNR has towards this development may be a determining factor behind the recent depreciation. “Tensions grew, risks are on the rise and this situation does not represent just a brief episode of depreciation, rather it seems to be part of a longer period,” Muscalu stated. In his turn, financial consultant Aurelian Dochia believes that it is obvious that there is a link between the political situation and the exchange rate’s evolution, but it cannot be established to what extent the political crisis contributed to this depreciation. “For most Romanians a very strong depreciation trend is worrying. Those that have credits in EUR are directly affected,” he explained for ‘Gandul’ daily. Dochia however claims that the other part of the population will be affected by the depreciation too. “The effects will be seen in prices,” the financial consultant stated, being of the opinion that fuel prices will be the first to rise, followed gradually by other prices that will fall in line with this trend.

Dealer: Repo tender, reason for significant interest rate drop

At the same time, the dealers state that the higher liquidities that some banks have after they contracted loans through the repo tender organized by BNR last Monday is a reason for the significant interest rate drop. The Central Bank loaned RON 13.646 bln (EUR 3.014 bln) to 12 commercial banks for a week’s time, the sum being very close to the record level registered two weeks ago (EUR 3.1 bln). Interest rates for one-week deposits dropped slightly, from 3.65-4.13 per cent per year to 3.43-3.91 per cent per year. In this context, it has to be underlined that the interest rates posted by commercial banks for one-day deposits continued to drop, from 2.21-2.7 per cent to 1.68-2.16 per cent, against the backdrop of higher liquidity on the market. Interest rates for one-week deposits dropped slightly, from 3.65-4.13 per cent per year to 3.43-3.91 per year.


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