Exchange rate moves up on Romanian central bank governor’s statements

The official EUR/RON exchange rate went up by 0.48% yesterday, to RON 4.6571 for EUR 1, according to Romania’s National Bank (BNR). Some local banks even started asking for a price of close to RON 4.7 for one euro. The exchange rate increase came after BNR governor Mugur Isarescu said on Monday that the central bank would keep a tight grip on interest rates this year while allowing the exchange rate more room for fluctuation, reports local Ziarul Financiar. The BNR board of directors decided to increase the monetary policy rate from 1.75% to 2% on Monday. Isarescu said that the EUR/RON exchange rate could fluctuate by 5-6% this year and that the slow depreciation, of about 2-3% per year, of the local currency registered in recent years has been good for the Romanian economy, thus hinting that the same trend may continue this year. He also explained that a controlled depreciation of the local currency was healthier for local companies than a brutal 10-15% adjustment. editor@romania-insider.com