Considering the average exchange rate in 2018, Romania’s currency (RON) has weakened by about 3% against the euro, this year, while Hungary’s forint (HUF) depreciated by 8% and the Polish zloty (PLN) lost about 4-5%, Romania’s National Bank (BNR) governor Mugur Isarescu argued in a press conference after the monetary board meeting on October 3, Economica.net reported.
He thus addressed the public debates about the imminent exchange rate correction in response (or as a solution) to the widening external deficits.
Isarescu stated that the local currency is stable and all the excessive reactions prompted by minor changes in the exchange rate have no grounds.
The market is functioning normally, he stressed. He also repeated that the currency weakening is not a solution to the widening trade deficit.
The currency weakening can simply not improve the external balance, he stated. For a genuine and sustainable improvement, a mix of monetary and fiscal measures are needed, accompanied by structural reforms, if possible, Isarescu said.