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Nov 23, 2007 14:23 EEST
November 23 (SeeNews) - The Romanian leu sharply rose in midday trading on Friday after touching a 22-month-low earlier in the day and dealers said they the central bank, the BNR, has intervened to support the weakening currency.
At 1140 GMT the leu has strengthened to 3.5940/60 per euro from 3.6820/40 two hours earlier, one dealer told SeeNews. The Romanian currency last traded cheaper at 3.6846 on January 5 last year.
"Right now everyone thinks it was a move by BNR to stop the further deterioration of the exchange rate," the dealer said.
The BNR does not comment on its moves on the foreign exchange market.
The leu has been under pressure for almost three weeks, since the country's central bank raised its annual inflation forecast for 2007 by 1.8 percentage points to 5.7%, beyond its target band of 3.0%-5.0%, and revised its end-2008 inflation projection to 4.3% from an earlier 3.7%. Consequently, global rating agency Standard & Poor's has revised its outlook on Romania from stable to negative.
Raiffeisen Bank Romania's chief economist Ionut Dumitru has told SeeNews that a healthy level of the Romanian currency would be in the range 3.40-3.50 lei per euro. At these levels the exchange rate would not affect negatively Romania's exports, Dumitru said.
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