Romanian currency avoids falling to all-time low rate against EUR helped by central bank intervention

The Romanian currency has avoided falling to another all-time low level against the European single currency despite strong depreciation pressure in the market due to central bank artificial intervention.

The central bank reference exchange rate slightly rose on Thursday to 4.7640/EUR, the second-highest all-time EUR/RON exchange rate, National Bank of Romania (BNR) data show.

However, the EUR/RON pair has remained over 4.77 in the forex market for most part of the last couple of days.

The EUR/RON pair approaches again the all-time low of 4.7648/EUR registered on January 25.

Analysts say the depreciation is driven by a mix of factors but central bank’s intervention avoided a new all-time low of the RON.

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“The EUR/RON had another test above 4.7700 yesterday, touching 4.7800 in the after-hours trading session. The historically high turnover is supporting the idea of official offers coming in to protect the Romanian leu,” ING Bank analysts said on Thursday in a research note.

“Unless these official offers curb the trend again, we see a 4.7650-4.7800 trading range for today, with an upside bias,” they added.

According to a recent Reuters poll, the Romanian currency is expected to weaken 1 percent in the coming year against the European single currency up to RON 4.795/EUR mainly due to the new taxes imposed this year to banks and energy and telecom firms.

US dollar lost 0.1 percent to RON 4.2131.

Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, stood on Thursday at 3.06 percent.