Romanian Leu Firms Slightly vs Euro in Dull Trading

The leu ended at 4.2440/2470 per euro, compared to 4.2470/2500 per euro on Friday.

"Nothing interesting happened on the market today. Trading was very thin," one dealer told SeeNews. The dealer sees the local currency changing hands in a range of 4.2250-4.2500 per euro this week.

ING Bank said in its report on Monday that the Romanian leu, burdened by fiscal imbalance, is likely to lose ground against the foreign currencies in the coming months.

"Although the leu has been oddly stable over the past months, most probably thanks to central bank actions, we believe it carries a sizeable weakening bias," ING Bank said.

"In the current benign market, the leu is an interesting carry play in its peer group, but the recent key rate cuts along with the massive liquidity injected to finance the budget gap increase its vulnerability in the face of a turn in international market mood. However, more worrying are domestic factors like the massive fiscal imbalance," the bank said.

The Romanian central bank, BNR, set its reference exchange rate at 4.2434 per euro on Monday, compared to 4.2436 per euro on Friday. For the U.S. dollar, the BNR set the reference exchange rate at 2.9572 versus Friday’s 2.9741.

Turnover on the interbank leu deposit market rose to some 2.850 billion lei on Friday from 2.375 billion lei on Thursday. The BNR will issue Monday’s turnover figures on Tuesday.

Interest rates on overnight leu deposits rose to 9.17%/9.67% on Monday from 9.12%/9.57%.on Friday.