RON hits new historic low on Thursday

Newsroom 05/07/2012 | 11:42

The domestic currency RON fell to a new historic low on Thursday with the EUR/RON exchange rate at 4.4796, which is an 0.18 percent increase from Wednesday, according to the National Bank of Romania, one day before MPs may vote to suspend the president.

The RON lost 0.6 percent against the dollar, with the RON/USD at 3.5827. Gold gained 0.7 percent, reaching RON 186.2 for one gram.

MPs are to vote on Friday on the suspension of President Traian Basescu, who is accused of breaching the constitution on several occasions. If the vote gets through, the president may be impeached following a referendum that will be held in early August.

ING said in a report quoted by Mediafax newswire that the acceleration of procedures to suspend the president have already put a depreciation pressure on the RON, and the seizing of power by USL may further weaken the domestic currency.

ING sees the RON/EUR at 4.55, although the National Bank of Romania is expected to step in and stabilize the RON, especially if the European Central Bank will limit to cutting the key interest rate, which is expected by the financial markets.