Romania’s currency hits new low against the euro

Romania’s currency reached a new all-time low versus the European currency on Friday, February 21, when Romania’s National Bank (BNR) announced an official exchange rate of RON 4.8026 to EUR, up from RON 4.7834/EUR the day before.

The US dollar reached a new record level against the national currency as well, rising from RON 4.4307 to USD on Thursday to RON 4.4462 to USD on Friday.

The reasons for the depreciation of the local currency against the euro are largely external and relate to the investors' risk aversion, in the context of the epidemic with the novel coronavirus, Claudiu Cazacu, consulting strategist at XTB Romania, commented for Agerpres.

“The depreciation we have seen yesterday and today comes along a longer-term trend and has multiple causes. The fact that we have reached a symbolic threshold [RON 4.8 to EUR] attracts attention and creates emotion, but it is not a surprise. The reasons for this movement are mostly regionally and externally, probably not exclusively economic that drive investors to want to flow out to safer areas. This is also seen in the currencies in our region that offer higher returns in general than those in major economies. The second aspect is due to local economic and political uncertainties. We are talking about a very big [public] deficit, we are talking about the question whether the measures announced and implemented are sustainable and what happens to the political situation, whether or not we will have a government,” explained Claudiu Cazacu.

(Photo source: Shutterstock)