Step-by-step budgets for 2009

Companies and banks have drafted their 2009 budgets at an exchange rate range of RON 3.45-3.52 for one euro, which is indicative of difficulties managers are facing as they make their forecasts for next year.

Most managers interviewed by Business Standard have considered an exchange rate of less than RON 4 for one euro, slightly above the current level. Thus, many companies are working with two scenarios, in order to consider the pessimistic alternative. For example, the Sanador medical service supplier made calculations based on an average exchange rate of RON 4.5/€1 for 2009, but in the worst case scenario, this estimate goes up to RON 5/€1.

Forecasts by most companies differ from the official estimate of the National Prognosis Commission (CNP), which speaks of a RON 3.6/€1 exchange rate in 2009. The difference is significant compared to the exchange rate taken into consideration by the authorities. Thus, according to officials of CFR Calatori passenger railway transport company, the Ministry of Economy and Finance indicated a RON 3.45/€1 exchange rate.

The evolution of the exchange rate is important especially for exporters, but also for companies who used foreign currency loans to finance their growth. Exchange rate fluctuations could make the difference between a profitable year and one in which companies register losses.

Business Standard