Romanian leu drops further vs euro

"The leu depreciated aggressively with no apparent reason today. It seems there are market players who are expecting the leu to weaken further and are pushing it lower to see whether the central bank will intervene," a local dealer told SeeNews.

The currency closed at 4.5740/5770 per euro, compared to 4.5500/5520 on Thursday and 4.5310/5330 on Wednesday.

The dealer added the leu opened at 4.5520/5550 per euro on Friday and changed hands between 4.5480/5500 and 4.5780/5800 during the trading session.

He also said the leu may lose further ground next week unless the central bank lowers the volume of liquidity it will inject into the interbank money market through a one-week repo deal expected on Monday.

"The central bank used to inject four to five billion lei in its repo auctions but last Monday it sold 12 billion lei," said the dealer.

Romania's central bank, BNR, set its reference exchange rate at 4.5694 per euro on Friday, compared to 4.5426 on Thursday. This is the leu’s lowest level against the euro since August 8. For the U.S. dollar, BNR set the reference exchange rate at 3.5117 lei versus 3.5104 lei on Thursday.

Turnover on the Romanian interbank leu deposit market rose to 1.78 billion lei on Thursday from 1.77 billion lei on Wednesday. The central bank will issue Friday’s turnover figure on Monday.

Interest rates on overnight leu deposits slightly increased to 4.43%/4.93% from 4.39%/4.89% Thursday.