“For now, the decline seems to be a reaction to the political events… However, it’s possible the fundamentals could be shifting, after three years during which the inflation differentials were not in our favor,” Isarescu told a news briefing.
“The leu’s evolution could be prompted by a mixture of elements,” he added.
The central bank’s chief said the exchange rate should have only a limited effect on the annual inflation rate.
Romania’s leu fell to record lows against the euro after a center-right government led by Mihai Ungureanu was overthrown in a no-confidence vote Friday, pushing through a psychological threshold of 4.4 units versus the European common currency.
“The decline is small, below 2% to 3% against the euro,” Isarescu said, adding that the exchange rate has stabilized during Wednesday’s session.
Isarescu’s comments suggest the central bank might be comfortable with the leu trading around 4.4 per euro.