Romanian Leu Soars Vs Euro, Unlike Regional Currencies

Publish date: 07-01-2010
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The leu extended gains against the euro Wednesday, bucking the regional trend, on foreign players' high demand for the local currency, despite the unexpected key rate cut announced Tuesday by Romania's central bank.

The leu closed at RON4.1600/RON4.1630, 0.6% stronger than RON4.1840/RON4.1870 at closing time Tuesday.

The leu's evolution is contrary to the evolution of the regional currencies that were slightly depreciated.

Romania's currency opened Wednesday at RON4.1830/RON4.1850 to the euro, almost similar with Tuesday's closing value, but rose rapidly after on high euro sales. The leu's touched an early high at RON4.152 to the euro, and later traded at RON4.1550/RON4.1570 against the euro at around GMT1100. In the second part of the trade, the leu was more stable, trading between RON4.1550 and RON4.1650 to the euro.

Romania's central bank on Tuesday decided to lower the key monetary policy rate by 50 basis points, to 7.5% on the year. The central bank set the reference rate at RON4.1620 to the euro, the strongest in almost eight months. On the money market Wednesday, overnight rates were at 7.8%-8.3%, down on the day, after the key rate cut.

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