Update: Political crisis hits national currency, the weakest RON/EUR exchange rate in five years. Unicredit – uncertain prospects

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The political crisis seems to hit the national currency every day. On Tuesday the National Bank exchange rates revealed the weakest RON in five years against the European currency, i.e. RON 4.5957 for EUR.

The previous low level was in August 3, 2012, when BNR announced a reference exchange rate of RON 4.6481 for EUR.

The exchange rate also changed against the US dollar and the Swiss Franc: RON 4.1189 for USD and RON 4.2327 for CHF.

By 11.00h the exchange rate reached the threshold of RON 4.59 for EUR the it fell to the lowest level of RON 4.5050 for EUR. After 13.00h, when BNR released the reference exchange rates, the national currency continued depreciation, media report.

Unicredit: If disputes continue, the national currency could turn even weaker

The uncertainties caused by the political situation have brought the EUR close to the RON 4.6 threshold, Unicredit economists say, not excluding it could exceed this threshold, if the political scene remains uncertain, digi24.ro reports.

Unicredit Bank explained the investors’ decisions related to the situation in Bucharest and the main economic developments in the weekly report sent to them.

“We expect the EUR-RON to evolve upwards, driven by uncertainties, until the political scene is clear,” Unicredit economists say. Similar developments could be seen in government bonds if political tensions intensify, the Unicredit economists say.

Bond yields have so far remained on a declining trend, not being affected by political turmoil.

 

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