However, ING points out the significant political risk before general elections in November, including pledges for relaxation of the fiscal policies that could endanger Romania’s agreements with international institutions.
The bank’s analysts note that European Central Bank’s plan to reduce financing costs of euro-zone states improved investors’ perception on Romania’s risk. On the other hand, the central bank’s foreign exchange reserve was boosted by last week’s Eurobond sale, giving it more ammunition to support the leu.
Last Tuesday, the Finance Ministry raised EUR750 million in a tap of its 6.5% Eurobond which was initially placed in June 2008.
On the local interbank market, the leu trades currently at around 4.48 per euro.