Romania's leu could end year at 3.8 against the euro, depending on the budget, Raiffeisen deems

Publish date: 21-01-2009
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Romania's national currency, the leu, will embark on an upward trend in the following months, with the exchange rate slipping to 4.2 versus the single European currency in March and 3.8 at year-end, but the 2009 budget remains a key factor in this evolution, a study of lender Raiffeisen shows.

The leu is seen at 4 units per euro in June and further up at 3.95 against the euro in September.

'Pressures for the leu's depreciation will remain in the following period, especially if currencies in the region ride the same downward trend against the euro,' according to analyst Martin Stelzeneder, quoted in the study.

The leu crashed since the beginning of the year, from a level of 4.0296 against the euro calculated by the central lender BNR for the first session of 2009 to a historic low of 4.3025 reported today.

Analysts of ING Bank Romania estimated earlier this month the leu could plunge to a maximum exchange rate of 4.70 against the euro in the third quarter of the year, as developed economies sink into recession and the central lender BNR limits its intervention due to the high costs of braking the leu's fall.

The same analysts previously anticipated a maximum level of 4.20 lei per euro for 2009.

The average exchange rate is estimated at 4.43 lei against the euro for 2009, which could drop to 4.40 by year-end. Analysts see the leu at 3.95 versus the euro on average in 2010, with a fall to 4 lei per euro at the end of the year.


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