RON/EUR exchange rate down to lowest level in nine months

BNR reference dropped yesterday 1.4 bani, to RON 4.1215/EUR, the lowest level in the last nine months. Referring to the economy of Romania, the Saxo Bank official believed that the GDP will advance 0.5 per cent in 2010, and the annual inflation rate will be 4.3 per cent, while the current account deficit will be 5.6 per cent of GDP. However not everybody is optimistic. The exchange rate will fall in 30 days below RON 4 per EUR, but will rise to RON 4.84 per Euro in 12 months if Romania does not carry out the reforms requested by IMF, and the central bank does not interfere on the foreign exchange market, Christian Blaabjerg, chief equity strategist with Saxo Bann, considers, quoted by Mediafax.

"The basic scenario shows that the exchange rate will fall in one month to RON 3.96/EUR, and then will advance to RON 4.1 per Euro in three months, and to RON 4.84 per EUR in 12 months. This scenario has a probability to be fulfilled of over 50 per cent, depending considerably on the actions of the politicians," declared Blaajberg in Bucharest, where he presented the conclusions of the report "Outlook 2010," research and macroeconomic analysis made annually by the analysts of the bank.

Blaajberg stressed that the exchange rate seen in 12 months does not take into consideration the possibility of the intervention of the central bank on the exchange market and includes the interruption of IMF agreement. "If the government fulfills IMF's requests, the RON will not depreciate so much, but the probability for this to happen is below 50 per cent," Saxo Bank official said. He stressed that the reforms requested by IMF are necessary and possible to fulfill, but it is necessary to have politicians who have the wish and determination to implement them. He pointed out that, if Romania fulfills the reforms requested by IMF, the RON will appreciate against the EUR and the USD, and the rate could reach RON 3.6 per EUR. He also cautioned that the estimates regarding the exchange rate are not connected with the fundamental indicators from macroeconomic level, but to the risk premiums from Romania.

As for the RON/USD exchange rate, Blaajberg considers that the rate will be 2.89 units in one month, and then will rise to 3.32 in a horizon of three months.

Economists estimate that RON strengthens in 2010

Romania could have the lowest inflation rate in the last 10 years, the chief economist of BCR, Lucian Anghel, declared on Money Show. But, not all the experts agree with this estimate. ING chief economist, Nicolae Chidesciuc, declared that ING foresees in 2010 an inflation rate of 5 per cent, over the target set by BNR of 3.5 per cent plus minus one percentage point. If about inflation the opinions are divided, about the RON the economists have agreed: the RON strengthens this year. It is not a tragedy that we have missed the inflation target, the important thing is the disinflationary trend, the economists of the commercial banks present last night at the Money Show said. There are still chances to see in 2010 the smallest inflation rate, Lucian Anghel, chief economist BCR, said.

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