Romania’s RON hits fresh all-time low vs. EUR

Sorin Melenciuc 16/01/2019 | 13:14

Romania’s currency, RON, has reached on Wednesday a fresh all-time low against the European single currency for the second day in a row, the exchange rate rising to 4.6830/EUR, National Bank of Romania (BNR) data show.

On Tuesday, the reference exchange rate was RON 4.6822/EUR, also an all-time low.

Experts warn that RON’s depreciation is normal due to large current account and fiscal deficits but expects the central bank to step in.

On Monday, the central bank eased the pressure on RON through an unexpected deposit tender of RON 12.9 billion, reducing the excess liquidity in the market.

“The EUR/RON tested the 4.69 level yesterday but likely ran into official offers as suggested by clustered trading and a spike in turnover around fixing time. Nevertheless, the official fixing once again marked a historic high, which could suggest that the central bank is aiming to smooth the speed of the Romanian leu’s weakening, rather than stop/reverse it,” ING Bank analysts said on Wednesday.

“Apart from the high FX pass-through, the National Bank of Romania is likely tormented by memories of the past when domestic savings were highly euroized,” they added.

US dollar gained 0.2 percent to 4.1063 RON.

Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, declined on Wednesday to 2.87 percent, a 7-month low.

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