Romanian PM Citu not concerned with currency weakening

The recent depreciation of the local currency against the euro helps reduce pressure on the economy and is not a cause for concern, says prime minister Florin Citu.

"It reduces the pressures on the economy and helps to avoid shocks on the labor market. It also helps us with the public debt," Citu said in an interview with Bloomberg.

He also said that the Government is monitoring the foreign market to borrow through the sale of bonds. The Government's plan envisages loans of about EUR 7-7.4 billion this year.

The leu has slightly depreciated in recent days against the euro. Since the beginning of the year, the euro strengthened by about 1.2% against Romania's currency and crossed the RON 4.9 to EUR benchmark. The variation is small compared to other currencies but significant for Romania's currency, generally staged under a managed float regime.

PM Citu also touched on the topic of the sovereign rating in the interview. Romania's sovereign rating is on the verge of the non-investing (junk) area with a negative outlook, and the prime minister expects the outlook's upgrade to take more time than the downgrade.

"While the companies are quick to lower their outlooks, it takes longer to improve them," but "the fact we've shown a clear and credible path should help," Citu says. "We'll see if they improve the outlook this year," he added.

The Liberal prime minister once again affirmed his commitment for reforms hinting that the resistance faced is significant.

"There's a resistance to reform and to change, and it's clear that it can't be done overnight," he said. "But I'm willing to pay any political cost to do it. I'm convinced that this ruling coalition will govern for the next four years."

(Photo source: Inquam Photos/Ilona Andrei)