The currency opened down at 4.48/4.482 per euro and hovered around opening levels in the first hours. Euro sales later pushed the currency to an intraday high of 4.468 against the euro, but the appreciation slowed down in the afternoon.
The leu gained over 1% versus the euro yesterday, amid a positive sentiment in the market. Participants said investors are optimistic about political stability following Sunday’s parliamentary elections, as well as about Romania signing a new deal with the International Monetary Fund.
Investors were also drawn by yield levels offered by the Finance Ministry, considering that the central banks in the region are expected to announce rate cuts.
“The recent moves are likely to attract attention and this may feed the positive dynamics of the leu and domestic debt sales. The finance ministry has showed it prefers to convert this increasing demand in larger debt issuance than to push funding costs rapidly lower. We think this approach of slowly decreasing yields should attract more capital,” ING Bank Romania said in a report Friday.
The central bank set the leu’s reference at 4.4747 to the euro, the highest rate in three months. Against the US dollar, the leu’s indicative firmed 0.9% to its strongest level since May, of 3.4205 units.
In the money market Friday, overnight rates rose to 5.4%-5.9% a year, from 5%-5.5% a year in the previous day.