Romanian Leu’s 6-Day Decline Longest Losing Streak in 4 Months
The leu weakened for a sixth day, its longest losing streak in more than four months, before Romania goes to polls on Dec. 9.
The leu depreciated 0.1 percent to 4.5452 per euro by 5 p.m. in Bucharest, the lowest level since Oct. 29. Yields on 2019 Eurobonds fell six basis points, or 0.06 percentage point, to 4.86 percent, according to data compiled by Bloomberg.
A campaign for the general elections started on Nov. 9 as the ruling coalition of Prime Minister Victor Ponta goes head- to-head with the opposition party supporting president Traian Basescu. The European Union cut Romania’s economic growth forecast to 0.8 percent this year on Nov. 7 from a previous estimate of 1.4 percent. The statistics institute will release data on third-quarter gross domestic product tomorrow.
The expectations of a weakening economy and “the upcoming elections argue for a weaker leu, but we believe it is likely to lose ground only slowly, given that the central bank’s actions to prop up the currency and also fears of these actions are set to persist,” Ana-Maria Morarescu, a Bucharest-based economist at Raiffeisen Bank Romania SA wrote in a note.
The central bank, which has a managed-float currency policy, increased a funding cap to 6 billion lei ($1.7 billion) in a weekly repo sale on Nov. 12, compared with 4 billion lei on Nov. 5 and Oct. 29. It last offered 6 billion lei on Oct. 15.
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