“Since the financial woes in Europe are not likely to ease down over the next few weeks, chances are [external] pressures will continue. Therefore, a clarification of the local political situation would help us greatly and will stimulate investor confidence,” Isarescu told a news briefing after a monetary policy meeting.
Romania is mired into a deep political crisis, following two government collapses in earlier this year and a recent fight for power between the current ruling coalition and President Traian Basescu.
Basescu faced a referendum last week on whether he should be removed from office, which he apparently survived due to low turnout. However, the country’s top court failed to validate the results and postponed its decision until September 12, people familiar with the matter told Mediafax earlier Thursday.
The central bank Thursday left its key rate unchanged at 5.25% a year, as expected, while maintaining the minimum reserve requirements unchanged at 15% for Romanian leu-denominated liabilities and at 20% for foreign currency liabilities.
“Adverse external developments, combined with persistent domestic political tensions, generated net capital outflows with an unfavorable impact on the leu exchange rate,” the central bank said.
Romania’s leu fell to record lows against the euro in July because of the political turmoil. Thursday, the leu traded at 4.61 per euro, close to an all-time low of 4.65 to the euro registered last month.