The leu and BVB take a plunge due to a drop in international markets

“Major players on capital markets have chosen to withdraw from the stock exchanges and buy euros. This led to an appreciation of the euro on all emerging markets, including against the leu,” a dealer of Banca Comerciala Romana (BCR), Narcis Noaghe, told Business Standard.

On foreign stock markets, indexes dropped 3-5 percent yesterday, compared to Friday’s quotations.

Locally, the euro had a volatile rate yesterday, between RON 3.73-3.72. The National Bank of Romania calculated a RON 3.7202/€1 exchange rate for today.
According to Noaghe, it is hard to predict a revival of the leu, because this depends very much on fear and emotions of foreign investors. Market sources have indicated that the central bank could intervene on the market and sell significant amounts of euros.

On the Bucharest Stock Exchange (BVB), indexes plummeted 4-5 percent, as a reaction to drops on international markets.

However, the depreciation of the leu is good for the businesses of exporters. “Every percent in the depreciation of the national currency translates to €30 million in average monthly earnings for exporters,” according to the President of National Exporters and Importers Association (ANEIR), Mihai Ionescu.