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Romanian Leu Slips Vs Euro, Hovering Around 4.3 Ceiling

Romania’s leu had deepened its fall against the euro in early trade Friday, threatening to break the 4.3-unit ceiling as repercussions of the coalition government collapse and international negative sentiments rally in on the local currency.
Romanian Leu Slips Vs Euro, Hovering Around 4.3 Ceiling
02 oct. 2009, 11:36, English

The leu opened at RON4.2630/RON4.2650 per euro on Friday, slightly weaker from Thursday’s closing of RON4.2600/RON4.2640.

„The leu started to fall immediately after the opening, driven by increased global aversion toward high-risk assets and an unstable political environment in Romania,” a dealer with a Bucharest-bank said.

Romania’s leu hit a low at 4.29 units to the euro in the first trading hour, but then it started to appreciate, with dealers suspecting the central bank’s intervention to stabilize the pair.

The central bank set a reference rate at RON4.2495 against the euro on Thursday, 1.22% weaker on the day. The domestic currency also lost gains versus the US dollar, as the indicative reached RON2.8619, nearly 2% lower from Wednesday.

On the money market Friday morning, overnight interests were up on the day at 11.5%-12.5%, even though the central bank boosted liquidity by injecting RON11.97 billion on Thursday.