“Following the recent moves and yesterday’s foreign currency reserve data, we have replaced our near-term positive call with a negative one and see a revisiting of the 4.65/EUR record low as quite likely,” ING said in a short report Thursday.
Romanian foreign exchange reserves fell to EUR32.14 billion in July, from EUR32.96 billion a month earlier, according central bank data.
The leu has fallen to record lows against the euro in the past month amid political tensions and market participants said the central bank has been less aggressive than in the past in its interventions to support the national currency.
Earlier this week, the leu recovered some ground versus the euro after a referendum on whether to impeach the President seemed to have failed because of low turnout. However, the Supreme Court has not yet validated the results and the leu has weakened again.
“Such persisting noise appears to continue weighing on the leu which, unlike most peers, had a difficult session yesterday and has once again moved past 4.60/EUR,” ING Bank said.
Thursday, the leu traded slightly above 4.61 per euro.