June 15 (SeeNews) - The Romanian leu on Thursday weakened the most against the euro since August 2012,
as political tensions heightened after the governing Social Democratic Party (PSD) withdrew support for his six-month old coalition cabinet led by Sorin Grindeanu, citing poor performance.
BNR set its reference exchange rate at 4.5872 lei per euro on Thursday, 0.45% weaker compared to 4.5667 lei per euro on Wednesday. This is the lowest exchange rate for the Romanian currency since August 1, 2012, when it stood at 4.63 lei per euro.
On Thursday morning, the leu changed hands between 4.5743 and 4.5921 per euro, according to real-time interbank forex trading data published by local portal Conso.ro.
Prime minister Sorin Grindeanu refused to step down on Wednesday night after the decision making making body of the governing Social Democratic Party (PSD) withdrew support for his six-month old coalition cabinet citing poor performance. The junior partners in the coalition government, Liberal-Democrat Alliance (ALDE), also withdrew support for Grindeanu on Wednesday.
"I will resign when president Klaus Iohannis names another prime minister from PSD, following consultations with the parties," Grindeanu said on Wednesday.
On Thursday, president Iohannis announced that he will appoint a new prime minister only after the incumbent one resigns or loses a no-confidence vote in parliament.
Grindeanu's decision to resign only if Iohannis appoints a new prime minister leaves only one legal option available to PSD - to initiate a censure motion against its own government. In Romania's history, this has only happened once, in 1999, when National Peasant Christian Democratic Party (PNCTD) withdrew support for its own prime minister Radu Vasile.
(1 euro=4.5872 lei)