Romania’s currency keeps sliding down versus EUR

Romania’s national currency, the leu (RON), reached a new low versus the European currency on Friday, February 28.

The mid-day official exchange rate announced by Romania’s National Bank (BNR) hit RON 4.813 to EUR, compared to the previous low of RON 4.808 to EUR reached on Tuesday, February 25, Ziarul Financiar reported.

Romania’s currency has thus returned to a trend of depreciation in recent days due to political instability and fears on the global financial markets caused by coronavirus.

However, the fundamental cause for the depreciation of the RON is the widening of the current account deficit that approaches the warning level of 5% of GDP and is fueled by the budget deficit that shows no signs of adjustment, according to the latest poll conducted by the CFA Association among its members in late February.

The European Commission (EC) will ask the EU Council to open the excessive deficit procedure (EDP) against Romania, EC Executive Vice President Valdis Dombrovskis said on Wednesday, February 26.

(Photo: Henning Marquardt | Dreamstime.com)

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