WB: Romanian Leu Set To Firm Vs Euro On Long-Term

Richter said short-term projects on the exchange rate are difficult, but the leu should follow an upward trend against the euro on the long-term.

The leu has lost a median 25% versus the euro since the crisis first hit at the end of 2008, reaching 4.2099 units in December last year.

In its April economic report, the World Bank said Romania's leu has gained 4% to 6% in nominal terms against the euro since October 2010. However, real effective exchange rates remain "visibly below pre-crisis levels," the report noted.

Tuesday, the leu closed 0.1% up against the euro at 4.086 units.

The World Bank estimated Romanian inflation will enter a downward path in the second half of 2011, once the effects of a 5 percentage point raise in the value added tax fade away.

"In February 2011, inflation was highest in Romania, reflecting partly the impact of a VAT increase introduced in mid-2010, and is likely to decline in the second half of 2011," the report said.

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