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Romania’s Leu Declines for Fourth Day Amid Election Concern

Dec. 5 (Bloomberg) -- The Romanian leu depreciated for a fourth day, retreating to a three-week low, amid concern this weekend’s general elections won’t settle a power struggle between politicians.

The currency slid as much as 0.4 percent and traded 0.1 percent down at 4.5381 per euro by 5:20 p.m. in Bucharest, the lowest one-day price since Nov. 15. Its weakened 0.6 percent in the past four days. Yields on the government’s euro-denominated bonds due 2019 were little changed at 4.696 percent.

“The recently re-emerged depreciation pressure on the leu is set to continue beyond the parliamentary election, as long as there is no clarity about the future economic policy of the governing coalition,” economists at Raiffeisen Bank Romania SA including Bucharest-based Ionut Dumitru wrote in a note today.

President Traian Basescu and Prime Minister Victor Ponta are caught up in a power struggle that triggered two government changes this year and a failed impeachment vote against Basescu. Ponta hopes the Dec. 9 poll will allow him to get a new mandate from Basescu, who said earlier this year he won’t nominate him as premier again. The president has the right to designate the premier after consulting the winners of parliamentary elections.

Ponta’s Social Liberal Union is on course to win 57 percent of votes, according to a survey of 4,957 people between Nov. 27 and Dec. 2 conducted by Avangarde and CURS. The Right Romania Alliance of parties aligned with Basescu would garner 17 percent, the survey showed.

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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