Romanian Leu Ends Stronger vs Euro

The leu ended at 4.2770/2780 per euro, compared to 4.2800/2820 per euro on Wednesday.

"The trading session much less volatile compared to yesterday when the leu gained significantly. It opened at 4.2770 per euro and was traded in a tight range between the intraday low of 4.2820 and the intraday high of 4.2750 per euro," one dealer told SeeNews.

"Trading volumes were medium-sized and a slight euro-selling pressure was felt on the market. [...] The 4.28 support level was broken and the leu succeeded to remain below it," he added.

"I think that support at 4.25 will be the [next] most appropriate level in case of further appreciation of the leu," the dealer said.

Romania’s central bank, BNR, set its reference exchange rate at 4.2778 lei per euro on Thursday, compared to 4.2811 on Wednesday. For the U.S. dollar, the BNR set its reference exchange rate at 2.8749 lei versus Wednesday’s 2.8650.

"The RON continued to trade dully around 4.29/EUR over recent sessions. Intraday dynamics have suggested the central bank has been frequently present in the market. It has not been excluded that BNR has intervened on the buying side of the EUR/RON market in order to replenish its FX reserves after the supposed expensive interventions of the past months," ING Bank said in a weekly market update on Thursday.

"Our near-term EUR/RON outlook is marginally skewed to the downside given the apparent generally favourable international market conjuncture. Still, we doubt any significant gains of the leu are on the short-term radar given the misaligned fundamentals of the Romanian economy," it added.

Turnover on the interbank leu deposit market fell to 2.055 billion lei on Wednesday from 5.861 billion lei on Tuesday. The BNR will issue Thursday’s turnover figures on Friday.

Interest rates on overnight leu deposits rose to 7.89%/8.39% on Thursday from 7.65%/8.15% on Wednesday.