Romania’s RON falls to 1-year low vs. USD

Romania’s currency, RON, declined by 0.5 percent on Tuesday against the US dollar, the exchange rate rising to 4.1080/USD, the highest level since June 2017, National Bank of Romania (BNR) data show.

Against the European single currency, RON lost 0.1 percent to 4.6665/EUR. Romania’s currency reached the all-time low of 4.6695/EUR on June 21, 2018.

RON’s depreciation is due to higher liquidity in the money market following central bank’s intervention through weekly repo operation.

BNR injected RON 16.65 billion (EUR 3.6 billion) into the banking market on Monday, the biggest amount ever recorded, through a repo operation (government securities-backed lending to banks), at a 2.5 percent yearly interest rate.

This move is designed to address liquidity shortage – and to cap interest rates in the market.

Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, declined on Tuesday to 3.32 percent, from 3.34 percent.