Monday evening, Basescu declined to sign Romania’s memorandum agreed with the IMF, saying he disapproves of a EUR0.07 excise duty on fuels.
The leu opened down at 4.442/4.445 per euro, from 4.434/4.4355 per euro at Monday close. It further depreciated, and at around 10:00 am, traded at 4.45/4.453 to the euro.
The local currency weakened to 4.4666 versus the euro after the first two hours of trading Tuesday, the lowest rate since October 10.
“The leu is bound to weaken further on the short-term, following yesterday’s announcement regarding the IMF memorandum,” said one dealer. “However, it is a normal reaction and trading volume remains within usual ranges.”
The central bank set the leu’s reference at 4.4359 versus the euro Monday, slightly stronger on the day. However, the leu’s indicative against the US dollar weakened 0.3% to 3.2745 units.
In the money market Tuesday morning, overnight rates were at 1.7%-2.2% a year.