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June 30, 2022
BUSINESS

Romanian currency appreciates, Euro, at 6-week low

The Romanian currency slightly appreciated, with the National Bank of Romania (BNR) announcing a reference exchange rate that dropped by 2.62 Ban (RON 0.0262), to 4.4924 RON/EUR, which represents a low for the last six weeks. A lower rate was announced by BNR on July 5, when the European currency had been quoted at RON 4.4796. This means that the Leu gained 3.3 percent points against the all-time low of 4.6481 RON/EUR registered almost two weeks ago, against the background of the political turmoil.Against the American currency, the reference exchange rate announced Thursday stood at 3.6611 RON/USD, up 0.42 Ban, while against the Swiss Franc it dropped by 2.2 Ban, from 3.7625 to 3.7405 RON/CHF. The interest rates posted by commercial banks for 1-day deposits remained high, at 5.72–6.22 pc. Yields ranged above the key interest rate, following BNR’s decision to reduce the sums it borrows to commercial banks through repo auctions.The situation of the reference exchange rate was also mentioned Tuesday by the head of the IMF economic mission, Erik de Vrijer. He said that the reference is close to the equilibrium level, and the RON has a small appreciation interval after things return to normal, but all forecasts depend on a rapid solution to the political crisis, Mediafax reports.Financial institutions made an evaluation of the basics, and their forecasts are on a medium term. The growth forecasts are slightly lower than last time, according to the source. These evaluation methods are relatively precise. The IMF uses several methods and see what they show. This exchange rate is near the even point and models tend to show a small undervaluation, so there would be a margin of appreciation. But the undervaluation is small and ranges within the error margin, Vrijer explained.The head of the IMF mission added that the new macroeconomic indicators were built started from the idea that the political crisis will soon end in Romania.

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