Analysts expect Romania’s currency to remain strong - Reuters poll

Romania’s currency (RON) will depreciate by 1.6% against the European single currency (EUR) over the next 12 months, according to a Reuters poll among analysts, quoted by Profit.ro.

This equates to a real strengthening of the country’s currency of over 2%, given the consumer price inflation is expected at 3%-4% over the coming 12-months and the GDP deflator, labour cost, producer prices or any other deflator are likely to be even higher. Compared to the expected performance of other currencies in the region, Romania’s currency is expected to underperform, as its twin deficit problem will rather deepen than ease.

According to the Reuters survey, most major currencies in Central and Eastern Europe will appreciate in the next 12 months, but this evolution is dependent on calmer conditions in global markets and the adoption of the expected monetary easing in the US and the euro area. The Polish zloty is expected to strengthen by 1.5% against the euro in the next 12 months, the Czech koruna is expected to rise by 2%, and the forint could increase by almost 4% against the European currency.

"The appreciation of the three currencies is linked to the expectations of monetary easing in the US and the euro area," said Krystian Jaworski, senior economist at Credit Agricole.

The Reuters survey was conducted between August 29 and September 4 among 31 analysts.

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