Leu Weakens for First Time in Three Days on Regional Easing Bets
The Romanian leu weakened the first time in three days, depreciating along with the zloty and koruna on speculation east European central bankers will ease monetary policy to aid weakening economies.
The leu slumped 0.3 percent to 4.5051 per euro at 2:58 p.m. in Bucharest. Poland’s zloty slid 0.3 percent and the Czech currency fell as much as 1.1 percent. Yields on Romania’s country’s 2018 euro-denominated bond rose a second day, advancing three basis points, or 0.03 percentage point, to 4.767 percent.
The Czech central bank may use the exchange rate as a tool to ease monetary conditions, Governor Miroslav Singer said in an interview for Mlada Fronta Dnes published today. The Czech and Polish economies shrank in the second quarter, while Hungary slid into recession. Romania’s economic growth will slow to 0.9 percent this year from 2.5 percent in 2011, according to International Monetary Fund forecasts.
“Emerging Europe’s currencies remained on the downward trend versus the euro pushed by worries that central banks in the region will relax monetary policy in order to prompt economic growth,” Piraeus Bank Romania SA economists, including Camil Apostol wrote in a note to clients today. “We see the leu closing the day on a downward trend in line with its peers.”
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