January 22 (SeeNews) - The Romanian leu weakened to an all-time low against the euro on Monday following massive protests over the weekend and political unrest after a second prime minister resigned in just a year.
The central bank, BNR, set its reference exchange rate at 4.6656 lei per euro on Monday, 0.09% weaker than 4.6514 lei per euro on Friday.
On Monday morning, the leu changed hands between 4.6610 and 4.6688 per euro, according to real-time interbank forex trading data published by information portal Conso.ro.
According to ING Bank, analysts, the euro/RON pair is likely to keep moving higher, within a 4.65-4.69 range for the week.
"Domestically, the negotiations for the new cabinet which is due to receive the confidence vote next Monday are unlikely to bring anything market moving. The RON is likely to remain the underperformer in the CEE and we could see some reaction from BNR [central bank], either in form of tighter liquidity control in the money market or FX interventions to curb RON weakening," ING Bank said on Monday in a daily market snapshot.
In December, CFA Romania, an association of investment professionals, said they expect an exchange rate of 4.6891 lei per euro in the following six months and 4.7329 lei per euro in 2018.
This is the third time in a week the leu weakens to historic low values.
In 2017, the leu on numerous occasions hit record lows amid public protests against controversial decisions of the Social Democrat-led government coalition. At the end of 2017, Romanians protested for seven Sundays in a row against government plans to overhaul the justice system.
On Saturday, some 100,000 Romanians in the capital Bucharest and other cities again took to the streets against planned changes to the Criminal Code that they see as an attempt to backtrack on the fight against corruption.
These latest rallies come only three days after Romania's president Klaus Iohannis approved the nomination of Viorica Dancila as prime minister, to replace Mihai Tudose who resigned after the ruling Social Democrat Party withdrew its support for him. Dancila now has ten days to form a cabinet.
(1 euro=4.6599 lei)