ING: A realistic exchange rate is closer to 4RON/EUR than 3 RON/EUR

The euro valued between 3.8 and 4 RON could be absorbed by the economy, and help adjust the external deficit, says Misu Negritoiu, CEO of ING Bank. "This is even a realistic exchange rate band for Romania, and would help improve competitiveness abroad. Over the course of a year, the euro has swept across an extensive band, from 3.1 to 3.9 RON. Clearly, the realistic exchange rate is closer to 4 RON/EUR than 3 RON/EUR," said Negritoiu.

He believes such an exchange rate would prompt the corrections necessary in preparation for the euro, and that the inflationary spurt it would spark in a first stage, would be easier to absorb later. "Other than that, there are no solutions to correct macroeconomic imbalances. The exchange rate is an outlet that others don't have, but it remains to be seen how the economy adjusts to a 4 RON/EUR exchange rate, because it would function as a correction factor and generate slower economic growth, a decline in consumption and the real estate market. This also entails risks, because such an exchange rate would directly affect real estate credit," Negritoiu adds.

Ziarul Financiar