Romania’s currency relatively resilient to political turmoil

The political turmoil prompted concerns regarding a possible sudden depreciation of the local currency (particularly among households), but the developments on the forex market do not justify such expectations yet. The local currency lost 0.3% versus the euro since before the crisis emerged last Thursday (September 2).

Media reports sell quotations at banks’ exchange houses of above 5 RON to EUR, and the volatility may be indeed higher when it comes to retail exchange rates (compared to the interbank market).

Year to date, the euro strengthened by 1.6% versus Romania’s currency - compared to 4.4% consumer price inflation in January-July alone.

Furthermore, the political outlook has not deteriorated permanently; therefore, the political tensions will predictably be treated by the National bank of Romania (BNR) as temporary.

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