The leu opened at 4.3895/4.393 per euro, from 4.3925/4.395 per euro at Friday’s closing, and traded in a narrow range in the first part of the session.
Friday, the leu fell to an all-time low of 4.401 to the euro shortly after the government was toppled by a no-confidence motion in parliament. President Traian Basescu has designated Social Democrat Victor Ponta as the new prime minister, pending parliament endorsement.
“Should the political uncertainty prolong, the leu could temporarily weaken past 4.4 per euro, but not by much. The central bank could try to limit the exchange rate’s volatility in the short run so it doesn’t send a signal that it is protecting a certain rate,” said Dan Bucsa, chief economist with UniCredit Tiriac Bank.
The central bank set the leu’s reference at 4.3747 to the euro Friday, slightly stronger on the day. The rate was computed before the confidence vote.
On the money market Monday morning, overnight rates were at 4%-4.5% a year.