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Sep 28, 2007 18:40 EEST
September 28 (SeeNews) - The Romanian leu on Friday ended firmer against the euro, amid strong demand for the currency prompted by high short-term interest rates on leu deposits, dealers said.
The leu ended at 3.3380/ 3.3400, stronger than 3.3710/40 lei on Thursday and 3.3830/40 on Wednesday
“The leu opened at 3.3730/60. It was active trading. The foreign currency was sold in high volumes, mostly by off-shore companies. The leu appreciated sharply versus the euro, probably because the interest rates on short-term leu deposits exceeded 7/7.5%," the dealer said.
Large interest rate differentials allow borrowing funds in low-yielding currencies and investing in them higher-yielding ones like the leu. The central bank set its reference exchange rate, used for statistical purposes, at 3.3559 lei per euro on Friday, compared to 3.3803 lei per euro on Thursday. For the dollar, the reference exchange rate was set at 2.3669 lei versus Thursday’s 2.3894 lei.
Interest rates on overnight leu deposits averaged 7.09%/8.03%, compared to 7.07%/7.99% on Thursday.
Turnover on the interbank leu deposit market rose to 1.13 billion lei on Thursday from 859.4 million lei on Wednesday. The BNR will issue Friday's figures on Monday.
Following are Friday'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):
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