“I believe the Central Bank could intervene at 3.85 lei to the euro. If it fails to intervene at that threshold, the currency could depreciate even further. There is major pressure on the leu to depreciate, since Romania is perceived as a risky country,” said Nicolaie Alexandru-Chidesciuc, Senior Economist of ING Bank.
The decline of Romania’s currency coincides with the vote by the US Senate to approve the €700 billion Paulson bailout plan, which also devalued the US dollar and lead to a drop of the NY Stock Exchange. European stock exchanges rose, and this trend was reflected also on the Bucharest exchange. Investors are also expecting the House of Representatives to approve the Paulson plan.
“The Romanian market will also rebound as a result of positive news; sellers will wait for better prices, while buyers will likely regain courage. However, we will not be able to speak of real growth, but rather of a recoup of a portion of this year’s losses,” according to a declaration for Business Standard by Sorin Carstea, Director of Trading for the IFB Finwest brokerage firm.
