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Dec 04, 2009 18:06 EEST
December 4 (SeeNews) - The Romanian leu weakened versus the euro on Friday ahead of a presidential run-off vote on Sunday, after hitting a 2-month high in the previous day, dealers said.
The leu closed at 4.2180/2200 per euro versus 4.2080/2085 per euro on Thursday.
The leu opened at around 4.2130 per euro and then lost ground, changing hands at 4.2250 per euro and even 4.2300, but the central bank intervened on the market and the currency firmed to around 4.21-4.22 per euro, one dealer told SeeNews.
There is no way to say whether the central bank will continue to intervene on the market after the run-off vote or will leave the leu to weaken towards 4.28-4.30 per euro, the dealer said.
Romania will hold a second round of presidential elections on December 6. The run-off is crucial for the country, as the winner will name the country's next prime minister who will have to restart key reforms of the economy and the justice system in order to win back the trust of international lenders, a key condition for the release of the next instalments of a 20-billion euro bailout package led by the International Monetary Fund (IMF).
Romania's central bank, BNR, set its reference exchange rate at 4.2062 lei per euro on Friday, compared to 4.2171 on Thursday. For the U.S. dollar, the BNR set its reference exchange rate at 2.7931 lei versus Thursday’s 2.7883.
"While FX interventions seem to dominate many previous sessions what stands out this time is the apparent aggression of these operations. […] Finance Ministry may be exchanging hefty hard currency amounts from its recent loans and the central bank may be rushing to sterilize this hefty additional leu liquidity through the FX market, to the fact that a firmer leu could provide a much needed aid for inflation to end the year in the target range," ING Bank said in its daily note.
Turnover on the interbank leu deposit market rose to 2.946 billion lei on Thursday from 2.665 billion lei on Wednesday. The BNR will issue Friday’s turnover figures on Monday.
Interest rates on overnight leu deposits were down to 7.61%/8.11% on Friday from 7.65%/8.15% on Thursday.
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