ING Sees Romanian Leu Stronger In 2011, On IMF Deal Success

ING Bank Romania revised its view on the leu and sees the local currency stronger in 2011 than its previous forecasts, following the positive impact of the agreement with the International Monetary Fund.

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ING sees the leu at 4.15 to the euro at the end of the first quarter and at 4.2 to the euro at the end of the year.

Previously, the bank estimated the leu would trade at 4.3 units end-March, and at 4.25 units by end-2011.

ING noted in a report that Romania has met all IMF requirements for the seventh tranche and the fund will almost certainly release the installment. Moreover, the path is clear now for discussions on a new agreement.

Talks for a new deal with the IMF may support the leu, ING analysts said. On the other hand, Romania's economy is still in recession, and that is holding back the local currency.

Also, the central bank might be against a too sudden appreciation of the leu, the analysts added.

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