Financial markets expect BNR to keep the exchange rate below RON 4.3/E1

International economic analysts said that the National Bank of Romania (BNR) will intervene to prevent the national currency from depreciating massively.

"I believe that the latest political evolutions will sharply affect the leu in a negative way, but, at the same time, we believe that BNR is ready to intervene on the foreign currency market to remove any risk of a sharp depreciation. A level of 4.30 is critical for the national bank at the moment," Benoit Anne, EM Debt&FX Strategist of the London-based Bank of America - Merrill Lynch, told Business Standard.

Referring to the fact that the Romanian government headed by Prime Minister Emil Boc lost a no-confidence vote yesterday, Neil Shearing, Emerging Europe Economist of the London-based Capital Economics Ltd Europe told Business Standard: "The fall of the government must not be viewed as a disaster. Look at what happened in Hungary. Of course, the economic situation is not similar, but the new government that was practically built from the ashes is much stronger than the one it replaced, and managed to meet the IMF [International Monetary Fund] agreement far better."

Although they admit that the political "noise" is harmful to the economy, international economic analysts said that Romania is not in a critical state yet. "It is too early to say what effect the fall of the Boc Cabinet will have on the IMF agreement, but it is not good news. Still, we must admit that the agreement with the International Monetary Fund is not threatened by any imminent risks," Lars Christensen, Chief Analyst Head of Emerging Markets Research of Danske Bank, told Business Standard.

standard.money.ro