Romanian Leu Gains First Time in Three Days on Liquidity Cap

Romania’s leu strengthened for the first time in three days after the central bank limited liquidity in the market and risk appetite improved amid speculation Spain is moving toward a bailout.

The currency gained 0.15 percent before trading little changed at 4.5766 per euro at 5:55 p.m. in Bucharest, after losing 0.2 percent in the past three days, according to data compiled by Bloomberg. Yields on 2018 euro-denominated bonds increased increased one basis point, or 0.01 percentage point to 4.078 percent.

Romania’s central bank limited its lending at the one-week repurchase agreements auction to 6 billion lei yesterday, to support the leu as commercial banks’ demand increased to a record high of 21.4 billion lei. The currency had traded to a two-month low before the bank capped funding on Oct. 8.

“The central bank provides indirect support to the leu by limiting the supply of local currency, thus sacrificing interest rates,” analysts, including Catalina Molnar at UniCredit Tiriac Bank SA, wrote in their notes today.

The euro rose above $1.30 for the first time in a week as German investor sentiment improved more than economists predicted and amid speculation that Spain is moving toward seeking financial assistance.

The leu exchange rate is “where it should be” and it reflects the country’s reality, Bogdan Olteanu, the central bank’s deputy governor, said in an interview with Ziarul Financiar newspaper today.

To contact the reporters on this story: Andra Timu in Bucharest at; Irina Savu in Bucharest at

To contact the editor responsible for this story: James M. Gomez at

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