Romanian Leu Closes Tad Weaker vs Euro in Dull Trading

The leu ended at 4.2805/2835 per euro, compared to 4.2780/2800 per euro on Thursday. It was traded at around 4.28-per-euro during the whole trading session, one dealer told SeeNews.

"I expect a slight depreciation of the leu to 4.30 per euro by the end of October," the dealer said, adding that political tensions in Romania ahead of presidential elections on November 22 could also add some pressure on the leu.

Romania's Parliament is due to vote on Tuesday on a no-confidence motion against the country's minority government of the Liberal Democratic Party, PD-L. The motion was filed earlier this week by two opposition parties, the National Liberal Party and the Democratic Union of Hungarians in Romania UDMR. The Social Democratic Party, which left the ruling coalition last week, has said it would also back the motion.

"If political instability continues, it is likely to have a negative impact on both the exchange rate and interest rates in the coming period," Raiffeisen Research said in its weekly CEE weekly bond markets outlook on Friday.

Romania’s central bank, BNR, set its reference exchange rate at 4.2776 per euro on Friday, compared to 4.2766 per euro on Thursday. For the U.S. dollar, the BNR set its reference exchange rate at 2.9014 versus Thursday’s 2.8952.

Turnover on the interbank leu deposit market rose to 1.667 billion lei on Thursday from 1.419 billion lei on Wednesday. The BNR will issue Friday’s turnover figures on Monday.

Interest rates on overnight leu deposits rose to 8.57%/9.07% on Friday from 8.53%/9.03% on Thursday.