Romania Succeeded in Keeping Leu Under Control: Ponta
The Romanian central bank, together with the government, managed to control the country’s currency, amid regional depreciation pressures before a second Greek vote, Premier Victor Ponta said.
Romania, whose leu has been the worst-performer in east Europe so far this year, has been affected in the past weeks by uncertainty over a Greek exit from the euro area after an inconclusive election May 6 and a fresh vote yesterday, Ponta said. The Balkan nation had “a special interest” in the Greek vote as 17 percent of its banking industry is owned by Greek lenders. Central bank spokesman Mugur Stet declined to comment on the bank’s market actions when contacted by phone today.
“We have already been affected like all the countries in the area in the last weeks, as the exchange rate came under pressure of financial speculation,” Ponta told reporters in Vienna today. “Fortunately, the Romanian central bank in joining the efforts with the government, succeeded to keep the exchange rate under control. But it was not easy.”
The market turmoil prompted by rising concerns over Greece’s future in the euro region helped push the Romanian leu to a record-low 4.5156 per euro on June 11, as Europe’s emerging countries in the east are tied to Greece through banking and trading ties. The leu has lost about 3.25 percent since the start of the year, while the Polish zloty and the Hungarian forint gained 4 percent and 7 percent.
Greece’s two largest pro-bailout parties won enough seats to forge a parliamentary majority in the election yesterday, official projections showed, paving the way for a coalition government and easing concern the country is headed toward dropping the euro.
New Democracy won 30 percent of the vote, or 130 seats, enough to form a coalition with Pasok, whose leader Evangelos Venizelos said he’d propose President Karolos Papoulias broker a unity government which would include Syriza and Democratic Left, the sixth-biggest party.
Ponta said the second Greek vote outcome is a reason to be “a bit more optimistic,” while the future of eastern Europe is difficult, and that he hopes Greece will keep its European path.
Adrian Vasilescu, an adviser to central bank Governor Mugur Isarescu, said May 23 that policy makers are “very closely” watching the developments of Europe’s debt crisis and is using “adequate instruments” to limit the impact of the turmoil on the leu.
The leu has declined 1.8 percent against the common currency in the second quarter, while the Polish zloty dropped 2.7 percent. The Hungarian forint, the best regional performer this year, gained 0.7 percent from the end March.
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