Romanian Leu Ends Weaker than 3.41 per Euro, Further Losses Expected

November 9 (SeeNews) - The Romanian leu weakened further and closed cheaper than 3.41 against the euro on Friday, as emerging markets suffered losses while the euro appreciated against the Japanese yen, dealers said.

The leu closed at 3.4160/90 after opening at 3.4000 per euro, one dealer told SeeNews. It closed at 3.4035/55 on Thursday, weaker than Wednesday's 3.3920/970 and Tuesday's 3.3750/80.

"The leu was affected mostly because of the euro's gains against the yen today which led to depreciations in emerging markets such as Hungary and Poland, too", the dealer said, adding the leu was likely to drop further next week.

Worsening macroeconomic environment in Romania has put pressure on the leu since Monday when the Romanian central bank, the BNR, raised its annual inflation forecast for 2007 by 1.8 percentage points to 5.7%, beyond its target band, and revised its end-2008 inflation projection to 4.3% from an earlier 3.7%. Also on Monday global rating agency Standard & Poor's revised its outlook on Romania from stable to negative.

The BNR set its reference exchange rate used for statistical purposes at 3.4112 per euro on Friday, compared to 3.4099 per euro on Thursday. For the dollar, the reference exchange rate was set at 2.3215 versus Thursday's 2.3229 lei.

Interest rates on overnight leu deposits were at an average of 7.29%/7.84% on Friday virtually unchanged from a day earlier.

Turnover on the interbank leu deposit market rose to 1.35 billion lei on Thursday, from 1,005.8 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. (0900 GMT) by the BNR, based on data provided by 10 commercial banks (in percent):