Romania Ctrl Bk: Leu’s Weakening Mirrors Econ Fundamentals

End-June, the leu fell to an all-time low of 4.3688 per euro, after the Constitutional Court rejected part of a government-imposed austerity plan aimed at reducing the budget deficit, raising concerns about the country’s political and economic situation.

The authorities in Bucharest later increased the value added tax level to 24% from 19% to offset the court’s decision and secure additional funds of a EUR13 billion loan agreement from the International Monetary Fund.