Romanian elections and Ponta II cabinet approval give local currency a Christmas bonus

The general elections and the parliamentary approval of the new cabinet appear to have acted as a tonic for Romania's currency the leu. According to business news service Bloomberg, the Romanian leu had gained 0.5 percent by midday (December 24 ) to reach RON 4.4229 per EUR 1 – the highest level seen since May this year.

Since December 9, the Romanian leu has been Bloomberg's best performing emerging market currency, appreciating by 2.5 percent in the two weeks after the general elections as investors gained confidence in the future political stability of the country.

Romania's Central Bank (BNR) currently has the exchange rate at RON 4.4231 to EUR 1, slightly weaker than Bloomberg's midday figure. The exchange rate was 4.5349 to EUR 1 on December 7, the Friday before the elections. In the following week the leu appreciated rapidly, reaching around RON 4.47 to EUR 1 by Friday, December 14. The rate remained similar for the following week before again appreciating sharply when the news broke that PM Victor Ponta's new cabinet had got the parliamentary green light. The exchange rate against the US dollar has gone through a similar change. On December 7 the rate was RON 3.5067 to USD 1, while today's rate is RON 3.3468 to USD 1. Read the Bloomberg article. Liam Lever, liam@romania-insider.com