Uncertainties about new Government send Romanian currency to new low

The Romanian currency the RON reached a new low on Monday (April 30), when the EUR was trading at RON 4.4045, mainly due to uncertainties about the measures the new Government in Romania will take after the cabinet led by Mihai Razvan Ungureanu was toppled.

The rate even exceeded RON 4.4 per EUR after 13,00 on the money market, when the Romanian Central Bank announced the reference rate, which is of RON 4.3970, a new historic low. On Friday (April 27 ), when the Government was dismissed after a no-confidence vote in the Parliament, the EUR was selling at RON 4.4010. The official rate on Friday was of RON 4.3747. Analysts expect the money market to remain volatile until the situation of the new Government and its proposed measures become more clear. Opposition leader Victor Ponta, the new designated Prime Minister, is expected to announce the list of ministers tomorrow, on May 1. The RON has been falling since the beginning of the year, with its previous lowest rate being RON 4.3794 in March. From an exchange rate of RON 4.07 to the euro at the end of April last year, the rate reached a peak of RON 4.36 against the euro in November. The Romanian currency followed a similar evolution path as in 2010, when it went from a rate of RON 4.07 to the euro in March to a peak of RON 4.37 in June 2010. The Romanian lei was a stronger currency in 2008, when the average rate was RON 3.68 per euro, but international turbulence sent it plummeting to an exchange rate of RON 4.23 against the euro in 2009. Last year, the average rate was RON 4.20/EUR 1. editor@romania-insider.com (photo source: Arhivafoto.ro)