Romania’s RON reaches fresh 3-week low vs. EUR

Sorin Melenciuc 31/05/2018 | 13:18

Romania’s currency, RON, depreciated for the sixth day in a row against the European single currency on Thursday, the exchange rate rising by 0.2 percent to 4.6485/EUR, the highest level since May 8, National Bank of Romania (BNR) data show.

On Wednesday, the reference exchange rate was RON 4.6399/EUR. US dollar lost 0.6 percent to 3.9734 RON.

Experts say the RON’s depreciation is due to higher liquidity in the money market on lower intervention decided by the central bank, but recent political tension and debates about the future of Pillar II pension funds may have played a role.

On May 7, Romania’s central bank raised the monetary interest rate from 2.25 percent to 2.5 percent, the highest level since February 2015, in line with economists’ expectations, who see the decision as a consequence of upward revision of the inflation forecast.

Following the central bank’s move, Romania’s money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, reached a 3.5-year record of 2.83 percent on Thursday.

The Romanian central bank also had seven open market operations during the last seven weeks, absorbing excess liquidity in the market.

But central bank’s intervention on Tuesday absorbed only RON 1.8 billion through 1-week deposit tender, compared with RON 6.2 billion on May 21.

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Sorin Melenciuc | 29/11/2022 | 10:17

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