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Nov 16, 2007 14:18 EEST
November 16 (SeeNews) - Romanian leu on Friday lost ground further, touching a fresh 2007-low as news of the country's widening current account gap boosted higher demand for euro from foreigners, dealers said.
"The leu opened at 3.4600/20 per euro and at the moment [1212 GMT] already trades at 3.4870", one dealer told SeeNews. The leu last traded cheaper on November 24, at 3.4904 lei per euro according to the central bank's data. It ended at 3.4620/40 on Thursday.
It hit one-year low of 3.4670 against the euro on Tuesday.
"Yes, it's because of today's news," the dealer said, asked if the central bank's data on the country's current account balance released on Friday might have caused the leu's downfall.
Romania's current account deficit for the first nine months of 2007 rose by 76.5% on the year to 11.801 billion euro ($17.2 billion) due to a widening trade gap, the central bank (BNR) said on earlier on Friday.
Romania's trade deficit for the nine months through September rose by 67% year-on-year, reaching 12.265 billion euro on a FOB/FOB (free-on-board) basis, the central bank said in a statement.
Romania's worsening macroeconomic environment has put pressure on the leu since last week when the Romanian central bank, the BNR, raised its annual inflation forecast for 2007 by 1.8 percentage points to 5.7%, beyond its target band of 3.0%-5.0%, and revised its end-2008 inflation projection to 4.3% from an earlier 3.7%. Also last week, the global rating agency Standard & Poor's revised its outlook on Romania from stable to negative.
($ = 0.6848 euro)
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