UPDATE 1- Romanian Leu Ends Weaker vs Euro after Touching Near 1-Yr Low on Risk Aversion

November 12 (SeeNews) - The Romanian leu ended weaker against the euro on Monday because of foreign investors’ unwillingness to take risks on emerging markets, dealers said.

The leu opened at 3.4250. After the first hours of trading, the Romanian currency reached an almost one-year low of 3.4513 against the euro. It was last traded cheaper last November 29 at 3.4625 per euro, central bank’s data showed.

“As foreign investors’ aversion to risk on emerging markets is rising, the [Romanian] national currency is even more vulnerable, because the foundations of the Romanian economy cannot resist," one dealer told SeeNews.

The leu closed at around 3.4440, weaker than the closing levels of 3.4160/90 on Friday and 3.4035/55 on Thursday.

“The prospects for the Romanian economy are not optimistic and it may cause the leu to depreciate further,” the dealer added.

Romania's worsening macroeconomic environment has put pressure on the leu since last Monday when the Romanian central bank, the BNR, raised its annual inflation forecast for 2007 by 1.8 percentage points to 5.7%, beyond its target band, and revised its end-2008 inflation projection to 4.3% from an earlier 3.7%. Also on Monday last week, the global rating agency Standard & Poor's revised its outlook on Romania from stable to negative.

The BNR set its reference exchange rate used for statistical purposes at 3.4414 per euro on Monday, compared to 3.4112 per euro on Friday. For the dollar, the reference exchange rate was set at 2.3617 versus Friday's 2.3215 lei.

Interest rates on overnight leu deposits were at an average of 7.28%/7.81% on Monday from 7.29%/7.84% on Friday.

Turnover on the interbank leu deposit market rose to 1.659 billion lei on Friday, from 1.35 billion lei on Thursday. The BNR will issue Monday's figures on Tuesday.

Following are Monday'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 percent):