Romania’s Leu Declines for Fourth Day Amid Election Concern
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 0.3 percent to 4.5456 per euro by 12:20 p.m. in Bucharest, the lowest since Nov. 15. Its weakened 0.7 percent in the past four days. Yields on the government’s euro- denominated bonds due 2019 rose two basis points, or 0.02 percentage point, to 4.714 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.
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