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January 31, 2023

Highest exchange rate in the last seven weeks

Because the Romanian currency has slightly devaluated in the first half today, the National Bank of Romania (BNR) has reported a 0.26 bani increase of the reference exchange rate to RON/EUR 4.4537, thus reaching the highest level of the last seven weeks. A higher exchange rate of RON/EUR 4.4588 was issued by the central bank on 28 June. The previous exchange rate was RON/EUR 4.4511.

RON has also devaluated compared to the U.S. Dollar, and the reference exchange rate has gone up by 0.27 bani, from RON/USD 3.3365 to RON/USD 3.3392. Compared to the Swiss Franc, the exchange rate has gone up from RON/CHF 3.6002 to RON/CHF 3.6046. Initially, EUR was ranked at RON 4.44465, close to the previous transaction interval of RON/EUR 4.4450 – 4.4460. In the first half of the day, quotations centred around RON/EUR 4.4550. Interest rates issued Monday morning by commercial banks for investments placed during the day in RON currency continued to drop due to the liquidity surplus and went below interest rates for deposit facilities, reaching 1.22 – 1.72% per annum, after the value was reported at 1.39 – 1.89 per annum on Friday. One week later, performances are still at 1.79 – 2.26% per annum.

ING: RON could continue its devaluation trend

European stock exchange markets have also reported a slight decrease after three weeks of increases and investors are expecting to see the minutes of the U.S. Federal Reserve meeting on monetary policy held in July, which will be released at the middle of this week. Dealers claim that transferred currency volumes are small and the RON devaluation was due to a negative regional atmosphere. “The slight decreases reported this morning by European stock exchange markets and the new record level achieved in the last few years by the performance of American state bonds suggest that RON could continue its devaluation trend. We still believe the favourable liquidity situation should limit the impact of increasing performances on a global level”, ING economists wrote in a note addressed to clients and cited by hotnews.ro. On the other hand, banks did not take part in Monday’s repo bid organised weekly by BNR because of the liquidity surplus in the banking system, dealers have stated. At the start of last week, only one bank drew RON 7 million at a monetary policy rate of 4.5%, although market performances were close to 2%. Through repo bids, BNR provides liquidity to commercial banks in exchange for state bonds at monetary policy rate. The amounts are usually loaned for a week.

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