Again, Romania’s currency weakened -by 0.23%- versus the euro. This meant the exchange rate to break the RON 4.7 per EUR threshold, setting a new record.
On January 10th, Freshplaza already reported on the problems troubling the leu. Now, the Central Bank announced a mid-day exchange rate of RON 4.708 per euro on January 21 and banks were selling as much as RON 4.776 against the euro.
The weakening was played down by the Central Bank’s strategy consultant Adrian Vasilescu. He explained that the temporary weakening of the local currency is a result of the massive year-end import and he blamed again those analysts predicting currency’s weakening.
Nonetheless, an article on romania-insider.com reports on fundamental drivers toward currency weakening. There is Romania’s current account deficit widened to € 8.73 billion in January-November last year, nearly 60% up year-on-year and over 4% of the year’s GDP.
Furthermore, inflation accelerated pushing up the real exchange rate and eroding the competitiveness of the local producers.
