Thus, for the first time in over a year, the monthly growth rate of traded volumes in the interbank foreign exchange market became negative. In May 2010, the value of forex deals stood at EUR37 billion traded, 5% more than EUR35.2 billion in May this year. In April, the market was still on the rise, up 7% against the same month of 2010.
In May, the leu’s appreciation trend in earlier months came to an end. The leu fell from 4.07 per euro towards 4.14 per euro. Dealers and analysts even suspected interventions of the central bank to tame exchange rate volatility, but even the higher volatility did not manage to spur deals.
“Even if there were central bank interventions, they were not spectacular. The market was largely quiet,” a dealer commented.
However, ING analysts recently estimated that the central bank has spent around EUR0.5 billion in May to calm exchange rate volatility. Earlier in the month, when the leu was still appreciating, the central bank likely bought foreign currency from the market, and later sold it when the trend reversed.