December 3 (SeeNews) - The Romanian leu gained further ground versus the euro on Thursday, amid high volumes and a trading session dominated by local players, dealers said.
The leu closed at 4.2080/2085 per euro versus 4.2400/2420 per euro on Wednesday.
"The leu followed a clear upward trend today. […] There was aggressive [euro] selling by several local banks in very high volumes," one dealer told SeeNews.
Romania's central bank, BNR, set its reference exchange rate at a two-month high on Thursday, 4.2171 lei per euro, compared to 4.2496 on Wednesday. For the U.S. dollar, the BNR set its reference exchange rate at 2.7883 lei versus Wednesday’s 2.8157.
The local currency opened at 4.2340/2370 per euro and appreciated to an intraday high of 4.2077. During the day it tried to stabilise around 4.2170 per euro and then at 4.21 per euro, but it continued to gain ground by the end of the day, the dealer said.
The leu's movement in the last three days is influenced by local factors only, the dealer said adding that we can witness more interesting developments on the forex market next week, after the run-off vote for president.
Romania will hold a second round of presidential elections on December 6. The run-off is crucial for the country, as the winner 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 instalments of a 20-billion euro bailout package led by the International Monetary Fund (IMF).
"We doubt considerably more firming potential is in the pipeline as commercial flows are likely to push it weaker. Speculative long EUR/short RON [new Romanian leu] positions could be built around just below 4.20 as the central bank support had eased around this level in a similar march that took place in late September," ING Bank said in a daily note.
Turnover on the interbank leu deposit market rose to 2.665 billion lei on Wednesday from 2.289 billion lei on Monday. The BNR will issue Thursday’s turnover figures on Friday.
Interest rates on overnight leu deposits were down to 7.65%/8.15% on Wednesday from 8.17%/8.67% on Wednesday.