Leu Slips to Lowest in 2 Weeks on President Suspension Procedure
Romania’s leu declined to the lowest level in more than two weeks after ruling coalition plans to suspend the president deepened the country’s political turmoil.
Romania’s currency depreciated as much as 0.6 percent and traded 0.5 percent lower at 4.4765 per euro at 3:04 p.m. in Bucharest, the fourth day of declines to the weakest intraday level since June 18. The country’s central bank has a managed floating policy for the leu, and set a record-low fixing rate of 4.4715 leu per euro today.
The ruling Social Liberal Union seeks to suspend President Traian Basescu and will file documents needed to start the required parliamentary procedures today, Liberal lawmaker Eugen Nicolaescu told Realitatea television station, without specifying the reasons behind the suspension attempt.
The leu’s sudden drop “could be because of the threatened actions to remove President Basescu,” Daniel Hewitt, a London- based analyst at Barclays Plc said in e-mailed comments. “The circumstances will keep pressure on the leu.”
The leu has fallen 3.3 percent this year, the second-worst performance among more than 20 emerging-market currencies tracked by Bloomberg.
Romania’s Finance Minister Florin Georgescu declined to comment on the factors pushing the leu lower, adding that he doesn’t have the means needed to “quantify the impact of political developments on economic parameters.”
“The government is strictly dealing with keeping the country’s financial stability,” Georgescu said today at a press conference in Bucharest after a government meeting.
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