Euro close to historical maximum again, rate constantly over RON 4.66 since last week: reaction by BCR’s Horia Braun

Anca Alexe 19/03/2018 | 16:48

The official EUR exchange rate reported on Monday by the Romanian National Bank (BNR) was RON 4.6650/euro, close to the historical maximum of RON 4.6679/euro. However, at the beginning of the day this level had been passed, after an entire week of rates of over RON 4.66.

On Monday at 9:15 am, euro was at a maximum of RON 4.6681, after which it balanced out and stabilised at 1 pm at RON 4.6650.

Euro has been over RON 4.66 ever since last Monday without interruption, as a result of political tensions as well as diverging announcements regarding the economic situation. The good news about the results in 2017 was overshadowed by January sectorial evolutions, with decelerations and even significant decreases from December.

Horia Braun, Chief Economist at BCR: “The Romanian currency has in the past week exceeded the 4.66 level versus the European currency, however its fluctuations have remained quite subdued, with RON continuing to be one of the most stable currencies in the Central and East European region. Its level is now only 0.1 percent higher than the end-2017 exchange rate, compared for instance with the Polish zloty, which is almost 1 percent weaker since the beginning of the year.”

Braun continues: “The FX market of the region has been on a slight depreciation path since the February volatility bout that hit financial markets, however the trend has not been too pronounced to cause worries, it was rather business-as-usual FX market fluctuations. In the most recent week, the market mood has been a little bit on the downside as a result of the announcement of US import tariffs for steel and aluminum products and their potential for causing more widespread global trade disruptions down the road, while today’s market volatility is perhaps more closely linked to market players’ emotions around the upcoming Fed policy meeting, which is widely expected to bring the first US interest rate hike of the year.

If perpetuated by further negative news, such an adverse mood can harm RON vs EUR pair further, but we currently don’t see a big jump in the exchange rate as imminent, even if medium term we still expect a 1-2 percent annual depreciation path to prevail, given the weakening fundamentals of the local economy, set however against the background of still favorable global financing conditions.”

 

BR Magazine | Latest Issue

Download PDF: Business Review Magazine March (II) 2024 Issue

The March (II) 2024 issue of Business Review Magazine is now available in digital format, featuring the main cover story titled “BAT DBS Romania Hub: A Vibrant New Office For An Employee-Centric
Anca Alexe | 27/03/2024 | 17:32
Advertisement Advertisement
Close ×

We use cookies for keeping our website reliable and secure, personalising content and ads, providing social media features and to analyse how our website is used.

Accept & continue