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December 3, 2021

EUR and USD reach new record levels for third day in a row

Bankers and PM Victor Ponta give assurances that the exchange rate will stabilize in the following period and will not reach a level of RON 5/EUR.

The pressure on the RON continues in the absence of visible intervention from the Central Bank, so that the National Bank of Romania’s (BNR) reference exchange rates for EUR and USD climbed to new record levels yesterday, namely to RON 4.6397/EUR and RON 3.8343/USD. Nevertheless, at the end of the trading day the RON recovered some of the steep drop it registered since halfway through the day, and quotes dropped slightly below RON 4.63/EUR, dealers suspecting that the appreciation was backed by an indirect BNR intervention and by foreign players that marked profit.

Around 5 PM the exchange rate stood at a level of RON 4.6275 – 4.6300/EUR, down from the RON 4.6370 – 4.6400/EUR level registered at the same hour on Monday. At the same time, the RON lost 14.8 per cent against the USD compared to the end of last year, down from 3.3393 units. The RON/CHF exchange rate climbed from RON 3.8314/CHF to RON 3.8630/CHF, representing a new high in the last 11 months. A higher official rate was last registered on August 12, 2011, back when it stood at RON 3.8926/CHF.

Negritoiu, ING: Exchange rate will grow but will not reach RON 5/EUR


In the following period the exchange rate will not reach a RON 5/EUR level but the RON’s depreciation will continue after the referendum too because no spectacular developments are seen in the economy, Misu Negritoiu, ING Bank Romania CEO, stated for wall-street.ro. “The country has bigger problems than the referendum. They have to do with institutional structure, political stability, political structure, economic measures; I’ve seen that very high public expenditures are being announced for the public sector. These factors put pressure on the RON’s depreciation. The referendum incorporates only some aspects of the exchange rate hike,” Negritoiu pointed out. An impeachment referendum is scheduled on July 29.

PM Ponta: RON’s evolution to normalize starting next week

The RON/EUR exchange rate will “normalize” starting next week, Premier Victor Ponta underlined on Monday evening in an interview for the public television station. He also stated that the RON will actually grow stronger after the political crisis ends through the referendum and after the government’s results are certified by the IMF mission. Prior to that, interim president Crin Antonescu stated on Monday on Digi 24 that he met BNR Governor Mugur Isarescu on his first day as interim president in order to understand “very well” the relation between the political crisis and the exchange rate and what has to be said in order to positively influence economic developments.Asked whether things would calm down with respect to the RON/EUR exchange rate after July 30, Antonescu said he was convinced things would ‘settle down’, but ‘only in one of the variants.’


Basescu: Only a naïve person could say the leu will recover

Suspended president Traian Basescu replied on The Money Channel on Tuesday, saying the National Bank no longer has resources to step in and stabilise the exchange rate and the foreign currency reserves are getting close to the minimum limit. He said the assertions of PM Victor Ponta belonged to a ‘naive’ person. ‘(…) It will be very difficult (to the leu – our note) to go back to the values it had when Mr. Ponta received the mandate because, you know it very well, the exchange rate carries an extremely high risk component. About 60-70 per cent of the stability of the currency comes from trust in political stability. We will not go back there, but at least we will stop the depreciation,’ Basescu said. ‘The National Bank needs to wait for a moment of quietness, with a good political stability outlook so that it can have an efficient intervention,’ Basescu also said.

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