The Leu: year of volatility

The national currency’s sinuous path in 2007 took it from RON 3.35/€1 in January 2007 to RON 3.52/€1 yesterday, with extreme intermediary values up to RON 3.11/€1, and dropping to RON 3.62/€1, contrary to the appreciation trend forecast by analysts early in the year. This was due to the American market liquidity crisis, Romanian National Bank policies, and expectations of foreign investors on the evolution of the Romanian economy. What conclusions do we draw one year after accession? We have a weaker national currency than at the beginning of 2007, a central bank that is encouraging speculation on the leu, and analysts increasingly reluctant to adventure into rigorous prognosis.