Romanian Leu Weakens On IMF-Hungary Negotiations Fail

The Romanian leu fell against the euro early Monday, on a negative regional sentiment caused by the suspension of the financing agreement between the International Monetary Fund and Hungary.

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The leu opened at 4.2775/4.28 against the euro, weaker than 4.267/4.27 at closing Friday.

Later, the leu continued to weaken, and traded at 4.285/4.287 per euro at GMT0700.

The IMF and the EU suspended talks with Hungary for the review of the loan agreement concluded late-2008. The IMF warned that Hungary needs to enact harsh measures in pursuit of a narrower budget gap, but the new government said the austerity measures caused the high unemployment and the economic contraction.

Romania's central bank set Friday the reference rate at 4.2628 to the euro.

On the money market Monday, overnight rates were stable at 2%-3%.

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