December 23 (SeeNews) - The Romanian leu firmed beyond 4.2 per euro on Wednesday after the country's parliament endorsed the government proposed by Prime Minister Emil Boc, putting an end to a two-month political deadlock, dealers said.
The two chambers of parliament approved the new ministerial team in a 276-135 vote, while 59 members of parliament abstained or were absent.
The leu closed at 4.1980/1998 per euro versus 4.2180/2230 per euro on Tuesday.
"Obviously, the approval of the government had a positive impact on the leu, because the market practically expects Romania’s stand-by deal with the IMF to develop well from now on," one dealer told SeeNews, adding that emerging currencies in the region also had an appreciating trend on Wednesday.
The new government needs to restart key reforms of the economy and the justice system. These conditions are vital for winning back the trust of international lenders, a key condition for the release of the next instalments of a 20-billion euro bailout package led by the International Monetary Fund (IMF).
"Today the leu pushed through the 4.2 level but we don't believe a level below 4.1 [per euro] is sustainable. Romania’s economy should go through a number of adjustments and the endorsement of the new cabinet is just the beginning of these adjustments," the dealer said.
Romania's central bank, BNR, set its reference exchange rate at 4.2047 lei per euro on Wednesday, compared to 4.2268 on Tuesday. For the U.S. dollar, the BNR set its reference exchange rate at 2.9506 lei versus Tuesday’s 2.9539.
Turnover on the interbank leu deposit market rose to 3.488 billion lei on Tuesday from 2.386 billion lei on Monday. The BNR will issue Wednesday’s turnover figures on Thursday.
Interest rates on overnight leu deposits fell to 4.57%/5.07% on Wednesday from 9.30%/9.80% on Tuesday.