Businesspeople believe the impact on the economy of the leu’s depreciation will be felt rapidly. Costs will rise, customers of travel companies will think twice about making a trip abroad and the budget deficit will be under even more pressure.
But there are also managers who say they took precautions – their spending is done in euros, employees’ wages are in euros and some analysts say it won’t be possible to stop the depreciation in the coming period and that Romanians have to brace for the time when they will live at RON5 per euro, but not in the short term. The depreciation of the leu will be a shock for the economy, believes Ovidiu Wencz, general manager of Dona drugstores, a company with a turnover of EUR170 million, who adds that what will happen from now on is important, and that if the euro reaches RON4.5, all costs will have to be recalculated.
“We can survive, but it will affect us because all costs will rise,” Wencz said. According to him, the state will continue to borrow because “we spend much more than we produce” and deficits will persist.
Economic analyst Aurelian Dochia does not rule out the possibility of the leu’s depreciation continuing over the next period. He adds that such a trend would have a major economic impact only if a significant depreciation occurs over a short period of time.
“If the leu depreciates from RON4.4 to RON5 per euro in a very short time, it would be dramatic. If the adjustment is gradual, most debtors will have time to adjust. That is why the central bank is interested in seeking to avoid sudden moves, without opposing the fundamental direction of the market.”
On the other hand, Aurelian Dochia warns that the pressure on the leu’s depreciation will continue at a time when markets are confused by the messages coming from the political environment.
Dragos Anastasiu, owner of the Eurolines group, which consists of 14 companies operating in transportation and tourism, says payments to all foreign partners (hotels and airlines) are made in euros, but the “advantage” is that part of the revenues collected from selling holidays are also in euros, so there is a balance.
“Any variation of the leu exchange rate influences us considering that 75% of our payments to foreign partners are in euros. We are dependent on the euro, this is a dependence which I don’t think we can escape. We can only await the euro adoption,” Dragos Anastasiu said.
(English version by Daniela Stoican)