“Unfortunately, the appreciation of the leu is not driven by foreign currency inflows coming from foreign direct investments, as I hope one will see at some point. Compared with Germany, which offers low yields and Portugal, which is seen as very risky, Romania is stable, has operated the adjustments discussed with the IMF, is repaying its debt and the yields provided are making investors feel comfortable. We have no signals about new foreign direct investment projects, though,” Pandi said.
The appreciation trend has stopped over the last few days, with the local currency even tending to weaken. Analysts explain this by the sentiment generated by the latest negative macroeconomic data coming from both Europe and US. The constant stream of negative news concerning Greece’s situation and the uncertainty surrounding the solutions thereof might influence investments in leu. Still, the central bank (BNR) has recently said new significant inflows of capitals are expected that will be a challenge to the monetary policy.
Citi official says that, even though this might be a good time for new investments made by companies already present on the market inclusively because of lower land and material costs, there is not enough confidence among companies and consumers, either.