Romania’s currency, RON, has reached on Tuesday a fresh all-time low against the European single currency for the sixth day in a row, the exchange rate rising to 4.7142/EUR, National Bank of Romania (BNR) data show. Compared to the end of 2018, the RON lost 1 percent of its value.
On Monday, the reference exchange rate was RON 4.7081/EUR, also an all-time low.
The underperformance of the Romanian currency is due to the high level of imports sold in December 2018 and to new taxes imposed by the government, according to central bank officials.
“The trade deficit reached EUR 14 billion in December 2018, and importers that brought goods in Romania are changing their RON into EUR to pay their foreign suppliers. Another reason for the depreciation comes from the new taxes announced by the government in December”, Adrian Vasilescu, an adviser of central bank’s governor, told BR.
Experts warn that RON’s depreciation is normal due to large current account and fiscal deficits but expects the central bank to .
“The National Bank of Romania signalled that it won’t let carry rates idle at the deposit facility and organised a deposit-taking auction,” ING Bank analysts said in Tuesday.
On Monday, the central bank eased the pressure on RON through the second deposit tender in two weeks, of RON 4.3 billion, reducing the excess liquidity in the market.
US dollar gained 0.3 percent to 4.1491 RON.
Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, stood on Tuesday at 2.97 percent.