Romanian leu drops to record low in the past 12 months

The leu continues to depreciate due to foreign currency buys, which have dominated the interbank foreign currency market lately.

This is the tenth consecutive auction session when the leu loses ground in favor of the euro, considering that the national currency's value dropped on average by 1,455 units (over 4 percent) from 5 November until yesterday. Foreign investors seem to target the RON 3.5/€1 threshold, but forecasts for December are more optimistic, due to foreign currency entries.

Analysts estimate that the exchange rate will be subject to pressures in December, due to funds sent from abroad over the winter holidays, so the leu could be subject to a short-term upward trend. The National Prognosis Commission estimates an exchange rate of RON 3.31/€1 for 2007, according to the latest forecast of RON 3.3/€1 for 2008 and RON 3.25/€1 for 2009.