Romanian Leu Ends Tad Weaker vs Euro in Line with Regional Trend

The leu ended at 4.2880/2930 per euro, compared to 4.2820/2850 per euro on Monday.

The Romanian currency opened near the 4.29-per-euro notch and hovered there for the rest of the day, one dealer told SeeNews. The other currencies of emerging markets in the region, especially the Czech crown, also weakened on risk aversion.

The uncertainty regarding exchange rate dynamics remains high for the time being, Raiffeisen Zentralbank Research (RZB) said in a note on Tuesday.

Political uncertainty has been putting pressure on the leu since the beginning of the month after the country’s minority government fell in a no-confidence vote.

The vote in Parliament on November 4 on the structure of the government proposed by Romania’s Prime Minister-designate Lucian Croitoru and a mission of the International Monetary Fund (IMF) in Romania that starts on Wednesday are the most important events in the period ahead that might have an important impact on the exchange rate as they are likely to decide the timing and the size of the next installments from the 20 billion euro ($29.78 billion) IMF-led loan for Romania, RZB said.

Romania’s central bank, BNR, set its reference exchange rate at 4.2897 per euro on Tuesday, compared to 4.2877 per euro on Monday. For the U.S. dollar, the BNR set its reference exchange rate at 2.8803 versus Monday’s 2.8513.

Turnover on the interbank leu deposit market fell to 1.923 billion lei on Monday from 3.307 billion lei on Friday. The BNR will issue Tuesday’s turnover figures on Wednesday.

Interest rates on overnight leu deposits fell to 9.43%/9.93% on Tuesday from 10.36%/10.86% on Monday.