The Romanian central bank BNR yesterday calculated an exchange rate of 4.2410 per euro, with the leu gaining 0.5%. The leu had fallen to the lowest level since the end of January on Monday amid a wave of withdrawals by foreign investors in the region, caused by the perpetuation of the dramatic situation in Greece.
“The higher risk aversion experienced on international markets, caused by Greece’s public debt crisis, had a stronger impact on the leu than we originally expected,” comments Ionut Dumitru, chief economist of Raiffeisen Bank. “Considering the relative exchange rate stability in the recent past, the fluctuation appears to be quite significant,” adds Dumitru.
On the local market, the leu managed to regain ground amid low trading volumes Tuesday.
“The whole region was shunned by investors. Volumes were very low, the central bank probably sold some foreign currency to strengthen the leu,” commented a dealer.
The euro started yesterday’s trading session on the Bucharest forex market below the RON4.25 mark, lower than Monday’s closing exchange rate. In the first part of the day, the exchange rate even fell slightly below 4.24, with investors taking a wait and see approach, and dealers suspecting a very discreet BNR intervention. In the afternoon the euro stabilized above RON4.24.
Investors were yesterday awaiting the results of a crucial vote in the Greek Parliament, where Prime Minister Papandreou’s new government was to face a confidence vote, and a vote on a package of additional measures meant to cut public spending in order to bring the deficit under control. On the vote hangs the European politicians’ decision to release the fifth tranche worth EUR12 billion, of the loan granted last year by the European Union and the International Monetary Fund. International lenders must also decide on a second rescue package for Greece, which should compensate for its inability to access international capital markets.