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Nov 24, 2009 18:09 EEST
November 24 (SeeNews) - The Romanian leu closed stronger versus the euro on Tuesday, influenced by domestic factors, dealers said.
The leu ended at 4.2650/2690 per euro, compared to 4.2780/2795 per euro on Monday and 4.2800/2860 per euro on Friday.
"Two factors jointly led to appreciation of the leu - the last day of the minimum reserves period and payments to the budget. The payments are made between 23 and 25, which led to a large number of euro-selling orders," one dealer told SeeNews. He also does not exclude presence of foreign players on the market.
Commercial banks have to lodge minimum reserves with the central bank by the 23rd of each month. In addition, companies operating in Romania have to make various payments to the state by the 25th of each month.
Romania’s central bank, BNR, set its reference exchange rate at 4.2648 lei per euro on Tuesday, compared to 4.2809 on Monday. For the U.S. dollar, the BNR set its reference exchange rate at 2.8525 lei versus Monday’s 2.8580.
"The market has no clear appreciation trend and is very unstable now, […] surprises are possible," the dealer said.
"It seems that the current level of the exchange rate already takes into account the impossibility of having a new government before the second round of presidential elections. In this case, we think that if a coalition is formed in the next days, it might have a positive impact on the leu. [...] However, it remains difficult to predict any political alliance at this moment," Raiffeisen Research said in its weekly Focus FX forecast on Tuesday.
Incumbent centrist Traian Basescu, leading with a thin margin after the first round of Romania's presidential elections held on November 22, will face Mircea Geoana, leader of the opposition Social Democrat Party, in a run-off vote. The winner in the run-off, to be held on December 6, will name the country's next prime minister who will have to restart key reforms of the economy and the justice system in order to win back the trust of international lenders, a key condition for the release of the next installments of a 20-billion euro bailout package led by the International Monetary Fund (IMF).
Turnover on the interbank leu deposit market fell to 3.174 billion lei on Monday from 3.484 billion lei on Friday. The BNR will issue Tuesday’s turnover figures on Wednesday.
Interest rates on overnight leu deposits grew to 8.96%/9.46% on Tuesday from 3.94%/4.44% on Monday.
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