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Romanian Leu Might Bounce Back On Good 3Q GDP – Ctrl Bkr

The Romanian leu might reverse by yearend part of its recent losses to the euro if third-quarter economic growth figures beat expectations, deputy central bank governor Eugen Dijmarescu said Thursday.
Romanian Leu Might Bounce Back On Good 3Q GDP – Ctrl Bkr
15 nov. 2007, 13:17, English

“Romania’s gross domestic product is growing on higher consumption. Perhaps we’ll see a change in the structure soon,” Dijmarescu said.

Romania’s first-half GDP growth slowed to 5.8% on the year, compared with 7.4% in the corresponding period last year, below expectations of 6.0%-6.5%.

The Romanian leu has lost nearly 4% to the euro in November alone, weighed down by poor investor sentiment over worsening economic fundamentals. It started to lose ground against the euro last week, when central bank Governor Mugur Isarescu said the bank expects the consumer price index to rise 5.7% this year, 1.8 percentage point more than its previous forecast, owing to a severe drop in farming output.

Dijmarescu said massive euro buy orders have been issued this month, but added Romanians working abroad usually send money back home at the end of the year and that could help the leu bounce back.

Romanian authorities expect the leu to end up around RON3.31 to the euro this year and at RON3.3 in 2008. The leu is currently trading at RON3.44 against the euro.