Romanian Leu Again Ends Flat vs Euro, C-Bank Expected to Raise Key Interest Rate

October 31 (SeeNews) - The Romanian leu ended flat against the euro on Wednesday at around 3.3400 lei per euro for a second consecutive day in calm trading ahead of the conclusion of a central bank board meeting, dealers said.

The leu closed at 3.3400 on Tuesday and Monday and 3.3460/90 per euro on Friday.

"The leu opened at 3.3370 per euro and was traded calmly to end a bit cheaper at 3.3400 [...] people are expecting the central bank's [BNR] decision later today", one dealer told SeeNews, anticipating a hike of the BNR's key interest rate by at least 0.25% to reflect accelerating inflation.

"The prevailing opinion among dealers is in favour of a hike of 0.25%, because an increase by 0.75% or even 0.50% would appreciate the leu too strongly," he said.

Romania's monthly consumer price inflation speeded to a faster-than-expected 1.08% month-on month in September from 0.86% in August. On an annual basis, inflation quickened to 6.03% in September from 4.96% a month earlier

At its previous board meetings held in February, March, May and June, the BNR cut its key interest rate from 8.75% to 8.0%, then to 7.50%, further down to 7.25%, and finally to 7.0%, to reflect slowing inflation. At its September meeting it kept the rate unchanged at 7.0%.

The BNR set its reference exchange rate, used for statistical purposes, at 3.3360 per euro on Wednesday, compared to 3.3433 per euro on Tuesday. For the dollar, the reference exchange rate was set at 2.3094 versus Tuesday's 2.3233 lei.

Interest rates on overnight leu deposits were at an average of 7.07%/7.70% on Wednesday, compared to 7.08%/7.63% on Tuesday.

Turnover on the interbank leu deposit market fell to 1.194 billion lei on Tuesday from 1.704 billion lei on Monday. The BNR will issue Wednesday's figures on Thursday.

Following are Wednesday's average bid and ask quotes of commercial banks on Romania's interbank market. They were calculated at 11 a.m. (0800 GMT) by the BNR, based on data provided by 10 commercial banks (in percent):