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Sep 14, 2007 18:41 EEST
September 14 (SeeNews) - The Romanian leu on Friday regained some ground against the euro after touching a five-month low earlier in the day due to high demand for the euro from foreign investors.
“After the leu had reached 3.3700/50 per euro, it stopped depreciating and recovered a bit to close at 3.3620/80,” one dealer told SeeNews.
The leu last traded cheaper on March 29, at 3.3658 per euro.
Asked whether the leu's depreciation was linked to other regional currencies, he replied: “We cannot explain this development with other emerging market currencies, such as the Czech crown, the Polish zloty and the Hungarian forint. Foreign investors, especially London banks, began to buy the euro yesterday afternoon and today they continued. Demand for euro was higher than supply”.
The Romanian currency closed at 3.3330 on Thursday, weaker than 3.3150/3.3100 on Wednesday, 3.3150/70 on Tuesday, and 3.3070/80 lei on Monday.
Dealers expect the Romanian currency to further weaken in the next days. Trading is then seen calming down and the leu edging up, following the central bank's announcement that the key interest rate will not be changed. Local media quoted the central bank's deputy governor Eugen Dijmarescu as saying on Thursday that he did not expect the BNR to further cut its key interest rate by the end of the year.
The Romanian central bank, BNR, set its reference exchange rate, used for statistical purposes, at 3.3592 lei per euro on Friday, compared to 3.3177 lei per euro on Thursday. For the dollar, the reference exchange rate was set at 2.4217 lei versus Thursday’s 2.3859 lei.
Interest rates on overnight leu deposits were at an average of 5.98%/6.86, compared to 5.94%/6.86% on Thursday.
Turnover on the interbank leu deposit market fell to 914.6 million lei on Thursday from 995.4 million lei on Wednesday. The BNR will issue Friday's figures on Monday.
Following are Friday's average bid and ask quotes of commercial banks on Romania's interbank market. They were calculated at 11 a.m. (0800 GMT) by the BNR, based on data provided by 10 commercial banks (in percent):
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