Romanian Ctrl Bk Head: Current Leu Level More Sustainable

“The leu’s recent fluctuations led to a more than welcome correction for the country’s current account deficit,” Isarescu said.

The leu weakened nearly 16% against the euro in the last six months of 2007 to RON3.6102 end-December from a five-year high of RON3.1112 in July. Since the start of this year, the leu has lost more than 2% against the euro and repeatedly hit three-year lows versus the single currency.

Isarescu said the exchange rate should help boost Romania’s poor exports and deflate imports without tampering with the country’s peaking inflation.

“Even without the current international turmoil, I think Romania should have narrowed its current account deficit,” Isarescu said.

Last year, Romania’s current account deficit widened 66.1% on the year to EUR16.87 billion, or an estimated 14% of gross domestic product, from EUR10.15 billion in 2006, mainly due to a larger trade deficit boosted by a flurry of imports from the European Union.