Elsewhere in the region, the leu’s peers were posting hefty gains versus the euro, after the People’s Bank of China cut its reserve requirement ratio for commercial lenders for the first time since 2008 to boost lending and economic recovery.
The positive sentiment was later fueled by a joint announcement of the U.S. Federal Reserve and some of the largest central banks in the world about coordinated actions to ease the strains in financial markets, by making US dollar funding cheaper for European banks.
S&P Tuesday cut Romania’s local currency ratings by one notch to junk in a move to equalize foreign and local currency ratings. The rating action followed the implementation of S&P’s revised methodology and assumptions for sovereign ratings.
The leu opened down at 4.358/4.36 per euro, but gained modestly in early session and traded near 4.35 per euro for most of the day.
The central bank set the leu’s reference at 4.3539 per euro, slightly weaker on the day. Against the US dollar, the leu’s indicative lost 1.03% to 3.2764 units.
On the money market, overnight rates were flat at 5.5%-6% a year.