Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo

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

Leu Retreats From Nine-Month High as Central Bank May Buy Euros

Jan. 11 (Bloomberg) -- Romania’s leu retreated from a nine-month high on speculation the central bank may buy euros to bolster its foreign-exchange reserves before payments it has to make to the International Monetary Fund.

The currency weakened 0.4 percent to 4.3849 per euro by 5 p.m. in Bucharest, after gaining 0.7 percent yesterday to the highest level since April 9. Yields on Romania’s June 2016 euro-denominated bonds rose four basis points, or 0.04 percentage point, to 3.09 percent.

Romania, which secured a 20 billion euros ($27 billion) bailout from the IMF and the European Union in 2009, has to repay about 5 billion euros this year. Foreign exchange reserves rose to 31.2 billion euros at the end of December from 31.17 billion a month earlier, according to the central bank.

“With conditions improving for the leu, coupled with an ongoing recovery in foreign appetite for leu debt, we think the central bank may use the opportunity to start rebuilding its reserves by buying hard currency at these levels,” Mihai Tantaru, a Bucharest-based economist at ING Bank Romania SA wrote in a note today. “This may keep the leu from advancing sharply over the coming weeks.”

The central bank will repay 3.8 billion euros to the IMF in 2013 and the government must return 1.2 billion euros, Prime Minister Victor Ponta said yesterday.

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

Please upgrade your Browser

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

Chrome, Firefox, Safari, Opera or Internet Explorer.