Financial analysts are considering a RON 4/€1 exchange rate

The bad feeling investors have in relation to the leu, and a rise in volumes traded on the interbank market, combined with a drop in foreign currency sent home by Romanians working abroad have led to the depreciation of the national currency.

“The context is negative for all currencies in the region, because we have to correct the current account deficit. The market is much more developed and the foreign currency Romanians working abroad are sending to the local market increased by a mere 2-5 percent compared to the double-digit growth registered in 2007,” said Lucian Anghel, Chief Analyst of Banca Comerciala Romana (BCR), the largest local lender in terms of assets. 

A 20 percent depreciation of the national currency would result in a 0.05 percent direct loss in gross domestic product (GDP). Clients who took out foreign currency-denominated loans in August 2007 now have installment payments 25 percent higher, due to the depreciation of the leu and a rise in interest rates.