Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Romania Leu Weakens Second Day; Yields Rebound From Record Low

Jan. 4 (Bloomberg) -- Romania’s leu weakened for a second day after posting the biggest gain among eastern European currencies in December as companies and households covered loans in euros. Eurobond yields rebounded from record lows.

The leu dropped 0.2 percent to 4.4249 per euro by 5 p.m. in Bucharest. Yields on Romania’s 2016 euro-denominated bonds rose 14 basis points, or 0.14 percentage point, to 3.07 percent, snapping a six-day decline after dropping to a record low yesterday of 2.93 percent, according to data compiled by Bloomberg.

The leu gained 1.5 percent last month, the third-best performer among emerging-market currencies tracked by Bloomberg in the period. Romanian companies and citizens are buying the single currency to benefit from that appreciation as they seek to cover their loan repayments in euros. About 63 percent of private loans are in foreign currencies, according to central bank data.

“The retreat of the leu to softer levels today points to the potential commercial demand kicking in at the attempts of the local currency to reach the 4.40 per euro threshold,” Mihai Tantaru, an economist at ING Bank Romania SA, wrote in a note.

Emerging-market stocks fell for the first time in 10 days today and currencies weakened after U.S. Federal Reserve policy makers said they will probably end debt purchases that have fueled investor demand for riskier assets.

The Romanian central bank’s foreign exchange reserves increased to 31.2 billion euros ($41 billion) at the end of December from 31.17 billion in November, showing that the leu’s appreciation was “market-driven,” according to Vlad Muscalu, a Bucharest-based economist at ING.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.