Romanian Ctrl Bk Shelters Leu After Government’s Fall - Dealers

Romania’s leu topped 4.3 units per euro immediately after the government collapsed following a no-confidence vote in parliament Tuesday afternoon, and dealers said the central bank stepped in and guided the leu back to 4.29 units per euro.

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"Initially, the leu started to lose ground and hit 4.3 units per euro, but then it suddenly increased to 4.29 units against the euro, stronger from its level prior to the announcement regarding the government's collapse. Seeing the regional currencies are on a downward path, we can say that the central bank is selling euros to prevent the leu's depreciation," a dealer at a Bucharest-based bank said.

At around GMT1240, the leu traded at RON4.29/RON4.292 against the European currency.

Romanian lawmakers on Tuesday voted 254 to 176 to overthrow the minority government led by Prime Minister Emil Boc, raising doubts over the country's ability to comply with the terms of a EUR13 billion financial program from the International Monetary Fund.

The Bucharest Stock Exchange showed little reaction following the government's fall, with the bourse's general BET-C index posting only a temporary 0.5% decline on the day, to minus 1%.

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