Romanian Leu Strengthens vs Euro, Dealers Suspect C-Bank Intervention

The leu closed at 4.0140/0164 per euro, compared to 4.0735/4.0800 on Monday.

“Trading volumes were very high. Probably it was the central bank,” one dealer told SeeNews.

Another dealer said that the Romanian currency gained to 3.99 against the euro earlier in the day due to an increased appetite for buying lei but declined to comment whether the rise was caused by a central bank intervention.

The Romanian central bank does not comment on its activities on the interbank foreign exchange market.

On Monday, traders said the leu weakened beyond 4.0 per euro on illiquid market as doubts about the ability of the country's new coalition government to tackle the economic crisis increased risk aversion among foreign investors.

Romania's central bank, BNR, set its reference exchange rate, used for statistical purposes, at 3.9860 lei per euro on Tuesday, compared to 3.9964 lei per euro on Monday. For the U.S. dollar, the reference exchange rate was set at 2.8054 lei versus Monday’s 2.7923 lei.

Turnover on the interbank leu deposit market fell to 1.227 billion lei on Monday from 1.477 billion lei on Wednesday, the last trading day last week before the Christmas holidays. The BNR will issue Tuesday's figures on January 5, the first day of trading after the New Year holidays.

Interest rates on overnight leu deposits were set at an average of 13.68%/14.75% on Tuesday versus 13.97%/15.16% on Monday.

Following are Tuesday's average bid and ask quotes of commercial banks on Romania's interbank market. They were calculated at 11 a.m. (0900 GMT) by the BNR, based on data provided by 10 commercial banks (in pct):