Romanian leu hits new all-time low amid row over public finances

Romania's central bank, BNR, set its reference exchange rate at 4.7669 lei ($1.09/1.0 euro) per euro on Thursday, 0.07% weaker than 4.7635 lei per euro on Wednesday.

On Thursday morning, the leu changed hands between 4.7600 and 4.7670 per euro, according to real-time interbank forex trading data published by information portal Conso.ro.

The leu's previous all-time low against the euro was recorded on January 25 when the leu changed hands at 4.7648 per euro following the adoption of an emergency decree regarding a massive fiscal overhaul.

CFA Romania, an association of investment professionals, said last month that they expect an exchange rate of 4.7967 lei per euro in the next six months and 4.8471 lei per euro in the next 12 months.

Former Social Democrat finance minister Eugen Teodorovici said on Thursday that the leu has weakened following what he described as alarmist statements about an allegedly precarious state of public finances made by the new, National Liberal Party (PNL) government.

"Today's statements by [finance minister] Mr. Citu have led our currency towards a historical minimum," Teodorovici said in a televised statement.

Romania's new finance minister, Florin Citu, said on earlier on Thursday that the budget gap could widen to 4% of gross domestic product this year and accused Teodorovici of deliberately faking numbers.

"The budget deficit widened to 2.84% [of GDP] in January-October and is estimated at over 4.0% at the end of the year. We have about 4 billion lei left in the reserve fund but we will pay all our bills," Citu said in a televised statement, presenting his initial conclusions after analyzing the state of public finances.

The PNL government took office earlier this month after the Social Democrat cabinet led by Viorica Dancila lost a no-confidence vote on October 10. The vote was requested by PNL who accused the Dancila government of incompetence.

(1 euro=4.7669 lei)