Romania’s National Bank (BNR) announced on Thursday, February 20, the weakest exchange rate for the national currency (RON), compared to the European currency.

Thus EUR was quoted at RON 4.7834, up 0.09% compared to the value reached on Wednesday according to the mid-day average published by BNR. The previous negative record exchange rate was RON 4.7808 to EUR, recorded on November 21, 2019.

Raiffeisen Bank chief economist Ionut Dumitru believes the local currency’s weakening is covered by the fundamentals.

“The currency has weakened for quite some time. It has a tendency to weaken due to the deterioration of the fundamental factors related to the trade balance deficit. The trade gap has widened in recent years, and we have a current account deficit [that is] among the largest in Europe. This deficit is largely caused by the budget deficit, in fact, we have a situation of twin deficits: current account deficit generated by a large budget deficit and we do not yet have any clarity from policymakers in terms of fiscal-budgetary adjustment,” Ionut Dumitru said, according to Incont.stirileprotv.ro.

He explained that because of the electoral period there is no indication that the corrective measures, which can’t be avoided indefinitely, are considered.

editor@romania-insider.com

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