The Romanian currency seems to be back calmer waters after the referendum on Sunday. The Monday official rate saw a strengthening leu, which was rated at RON 4.55 for EUR 1, from RON 4.61 on Friday, before the presidential impeachment vote.

Commentators suggest the result – the invalidation of the vote and the return of the suspended president to his presidential seat – was soothing news for investors. The RON went up against the EUR by 1.2 percent, putting it at its strongest against the euro for the last two weeks.

Dealers quoted by Romanian media suggest someone tried to take the rate down and do not exclude an intervention from the country's Central Bank (BNR).

However, Capital Economics data points to further political instability, which could affect financial markets. If the Government decides to take alternative measures against the president, new measures from the European Commission could emerge and that would raise questions over the agreement with international financial institutions, according to Capital Economics analysis. The British analysts even foresee the Romanian currency reaching new lows, exceeding the RON 4.64 for EUR 1 rate, which is the historic low so far.

The leu has been depreciating since the beginning of July. The average rate in June was of RON 4.46 for EUR 1.

editor@romania-insider.com