Romanian Leu Ends Tad Weaker vs Euro

"It seems that the leu was affected by the new forecasts published by the European Commission and especially the budget deficit projection", one dealer told SeeNews. The local currency touched an intraday low of 4.3480 per euro before recovering a little. The EU executive on Monday cut its forecast for Romania's economic growth in 2009 to 1.8% from 4.7% previously, and projected a budget gap equivalent to 7.5% of gross domestic product.

The leu has been losing ground against the euro in the first few weeks of January as concerns about how the country's new government will handle an expected economic slowdown fuelled negative sentiment among investors towards the currencies of emerging markets and especially towards the leu, dealers have said. They suspected a central bank intervention last Tuesday, aiming to stop the local currency from slumping further and since then the leu has been traded around 4.3 per euro, a mark that would be difficult to go beyond, traders said.

Romania's central bank, BNR, set its reference exchange rate at 4.3025 lei per euro on Tuesday compared to 4.2917 lei on Monday. For the U.S. dollar, the BNR set the reference exchange rate at 3.3182 lei versus Monday's 3.2336 lei.

Turnover on the interbank leu deposit market fell to some 2.59 billion lei on Monday from 2.95 billion lei on Friday. The BNR will issue Tuesday's figures on Wednesday.

Interest rates on overnight leu deposits fell to an average of 8.39%/9.21% on Tuesday from 10.06%/10.97% on Monday.

Following are Tuesday's average bid and ask quotes of commercial banks on Romania's interbank market. They were calculated at 1100 (0900 GMT) by the BNR, based on data provided by 10 commercial banks (in pct):