Romanian leu hits all-time low amid protests, political unrest

Romanian leu hits all-time low amid protests, political unrest Romanian leu down

BUCHAREST (Romania), November 13 (SeeNews) - The Romanian leu on Monday weakened to an all-time low against the euro following protests against government plans to introduce controversial changes to the fiscal and judicial system.

The central bank, BNR, set its reference exchange rate at 4.6495 lei per euro on Monday, 0.23% weaker than 4.6390 lei per euro on Friday.

On Monday morning, the leu changed hands between 4.6480 and 4.6612 per euro, according to real-time interbank forex trading data published by local portal Conso.ro.

On Sunday, thousands of people rallied in Bucharest and other Romanian cities to protest against fiscal changes announced earlier by the government and to support the fight against corruption.

On Wednesday, Romania's governing coalition comprising the Social Democratic Party (PSD) and centre-right Liberal-Democrat Alliance (ALDE) approved an emergency decree to change the country's fiscal code starting January 2018. The changes, which have drawn fire from businesses, stipulate that workers will have to pay the social security contributions currently paid by employers, while income tax will drop from 16% to 10%.

In the view of employees, the changes will not increase their net salaries, as the government claims, and will only complicate their fiscal position.

At the beginning of November, businesses and Romanian president Klaus Iohannis asked the governing coalition to abandon the planned tax changes which in their opinion will lead to fiscal chaos.

People also protested against against PSD's plans to make possible the appointment of Romania's chief prosecutors by the justice minister, without the control of the president.

This was the second straight Sunday of protests in Romania. On November 5, some 35,000 people protested in Bucharest and other Romanian cities to support the fight against corruption.

Romania's second-largest political force in parliament, opposition National Liberal Party (PNL), intends to file a censure motion this week against the government over the emergency decree and also intends to challenge the same decree before the Constitutional Court.

However, a censure motion has little chances of passing, as PSD controls 220 of 465 seats in parliament, while their government coalition partner ALDE controls a further 23.

PNL has 99 MPs, while the centre-right Save Romania Union (USR) and the centre-right Popular Movement Party (PMP) have 43 and 24 MPs, respectively. The Democratic Alliance of Hungarians in Romania, which usually backs the PSD-ALDE coalition government, has 30 seats. National minorities have 17 seats and independents hold nine seats.

Political tensions heightened on Monday, as PNL and USR demanded that PSD leader Liviu Dragnea resign as head of the lower house of parliament, after Romania's anti-corruption body DNA opened a new criminal investigation against him.

Dragnea is suspected of setting up an organized crime group and forging documents to illicitly obtain EU funds. Eight other suspects are also being investigated in the same probe, a DNA press release showed on Monday.

(1 euro=4.6495 lei)

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