Romania’s leu will continue to fall in February, despite its lately growth, analyst says

The fall of the leu seen lately was caused by issues concerning the Romanian economy rather than speculative deals, according to Christensen. The official noted a 4 lei per euro exchange rate could be seen if the appropriate monetary policy measures will not be taken.

Christensen explained the future evolution of the Romanian currency will very much depend on the financial moves taking place on the international stage.

The depreciation of the leu will also put pressure on the monetary policy session the Central Bank of Romania will hold on February 4. Danske Bank analysts believe the central bank will widen the key policy interest by 0.5 percentage points, to 8.5 percent.

The bank official explained in the last years many investors relied on the leu due to Romania’s economic growth and it EU accession, in January 2007. Yet, due to the highly political instability and the economic unbalances, investors showed reticence in relying on the leu in their activities.