Speaking at a news conference after a central bank monetary policy meeting, Isarescu said Romania’s inclusion into a JPMorgan emerging-market government bond index has spurred investors’ appetite for Romanian debt.
The leu also benefited from extra capital flows after investors withdrew from the region following tensions between Russia and Ukraine.
“Unlike Turkey, which witnessed an increase in capital outflows amid the tensions, Romania has been a temporary beneficiary of the cash flows from Ukraine or Russia,” Isarescu said.
Romania’s leu strengthened to 4.431 versus the euro last week, its highest level in six months. Tuesday, the leu closed at 4.4375/4.44 to the euro after a quiet session, unaffected by the central bank’s monetary policy decisions.
The central bank left its key lending rate unchanged at 3.5% at the Tuesday meeting. The bank also maintained the current levels of its minimum reserve requirements for both leu and foreign currency liabilities.
“It would have been almost impossible to lower the minimum requirements this month, considering that we have to repay debt worth over EUR2 billion,” Isarescu said.