Romania’s currency, CEE region’s worst performing this year – Reuters poll

The Romanian currency leu has been the Central and Eastern Europe (CEE) region’s worst performing this year, mainly due to the unpredictable fiscal policy and growing economic imbalances, according to a Reuters poll, which was carried out from July 1 to 3 among 34 analysts.

“When you have the twin deficit story in place, in spite of the global environment getting a bit better for risky assets we still expect the Romanian currency to underperform,” said Ciprian Dascalu, Chief Economist for Romania at ING, quoted by Reuters.

The “twin deficit” refers to the country’s budget and current account deficits. Romania’s general government budget deficitwidened to 1.4% of GDP in January-May, while the current account deficit increased by 38% in the first four months of the year, to EUR 2.3 billion, compared to EUR 1.66 billion in January-April 2018.

The same Reuters poll said that the Romanian leu is seen weakening slightly in the coming year to RON 4.81 per EUR 1 from RON 4.725 per EUR 1.

Across Central Europe, the main currencies are seen firming slightly against the euro in the coming year according to Reuters, as central banks in the region point to stable rates ahead in contrast to the easing signalled in Frankfurt and Washington.

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