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

October 30 (SeeNews) - The Romanian leu ended flat against the euro on Tuesday at around 3.3400 lei per euro in calm trading ahead of a Wednesday central bank board meeting, dealers said.

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

"The leu opened at 3.3370 per euro and was traded calmly, without fluctuations", one dealer told SeeNews. "At the moment everyone is awaiting tomorrow's meeting of the central bank [BNR]", the dealer said, anticipating a hike of the BNR's key interest rate by at least 0.25% to reflect accelerating inflation.

"Today the expectations are for a hike of 0.25%, because an increase by 0.50% would appreciate the leu too aggressively, by attracting foreign investors and causing speculative moves on the market," she 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 3.3433 per euro on Tuesday, compared to 3.3402 per euro on Monday. For the dollar, the reference exchange rate was set at 2.3233 versus Monday's 2.3181 lei.

Interest rates on overnight leu deposits were at an average of 7.08%/7.63% on Tuesday, compared to 7.02%/7.70% on Monday.

Turnover on the interbank leu deposit market rose to 1.704 billion lei on Monday from 1.383 billion lei on Friday. The BNR will issue Tuesday's figures on Wednesday.

Following are Tuesday'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):