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Romanian leu hits fresh all-time low against euro amid higher deficits

Romanian leu hits fresh all-time low against euro amid higher deficits Romanian leu down

BUCHAREST (Romania), January 9 (SeeNews) - The Romanian leu weakened to an all-time low against the euro on Wednesday following current account and fiscal deficits, analysts said.

The central bank, BNR, set its reference exchange rate at 4.6722 lei per euro on Thursday, 0.11% weaker than 4.6670 lei per euro on Tuesday.

On Wednesday morning, the leu changed hands between 4.6572 and 4.6744 per euro, according to real-time interbank forex trading data published by information portal Conso.ro.

According to ING Bank analysts, the leu's depreciation was to be expected, taking into account the continuous widening current account and fiscal deficits.

"The EUR/RON tested the upside for most of yesterday’s trading session, closing just below 4.6700. BNR Governor Mugur Isarescu avoided any statements regarding the exchange rate in the press briefing following the Board meeting. However, with the central bank apparently less concerned about the inflation outlook at least in the short term, we expect a shift higher in the comfort range for the EUR/RON. Timing remains a tough call though," ING Bank said on Wednesday in a daily market snapshot.

Romania's current account recorded a deficit of 7.99 billion euro ($9.14 billion) in January-October, compared to a deficit of 5.267 billion euro in the year ago period, the latest data from the central bank showed.

Also, the country's consolidated budget deficit widened to 2.7% of the projected 2018 gross domestic product (GDP) in the eleven months through November, from 1.21% of GDP a year earlier, finance ministry data showed.

The leu's previous all-time low against the euro was reached on June 21, 2018. At the time, the leu changed hands at 4.6695 per euro following massive protests sparked by amendments to the Criminal Code passed by parliament.

(1 euro=4.6695 lei)

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