Romanian currency hits 4-month high against EUR on bond inflows from foreign investors

The Romanian currency reached a 4-month high level against the European single currency on bond inflows from international investors but analysts see medium-term risks for weaker RON.

The central bank reference exchange rate declined on Tuesday to 4.7348/EUR, the lowest EUR/RON exchange rate since January 31, National Bank of Romania (BNR) data show.

The EUR/RON pair reached an all-time high of 4.7648/EUR on January 25.

Analysts say that RON’s appreciation is driven by bond inflows from foreign investors.

“The EUR/RON broke the 4.7400 support level yesterday on heavy turnover likely on the back of strong demand for the 10Y local currency government bond auction, closing the day near 4.7300. For today, we could see some stabilisation, with medium-term risk remaining to the upside as non-debt flows are favouring a weaker RON,” ING Bank analysts said on Tuesday in a research note.

US dollar lost 0.9 percent to RON 4.2093.

Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, stood on Tuesday at 3.24 percent.