Leu Drops Fourth Day From Year-High on Demand for Cheaper Euros
The leu retreated for a fourth day from its strongest level in a year as Romanian companies and individuals took advantage of cheaper euros to meet foreign- currency requirements.
The currency slid 0.3 percent to 4.3723 per euro by 5 p.m. in Bucharest, paring this month’s advance to 1.6 percent. Yields on Romania’s June 2019 euro-denominated bonds rose three basis points, or 0.03 percentage point, to 3.826 percent.
The leu appreciated to its highest level in a year on Jan. 16, the day after JPMorgan Chase & Co. (JPM) said the country’s domestic bonds are eligible for its emerging-market government bond index. About 63 percent of private loans taken out in Romania are denominated in foreign currencies, according to central bank data.
“We expect the leu to gradually move toward 4.38 per euro today, driven by net commercial demand for hard currency,” Mihai Tantaru, a Bucharest-based economist at ING Bank Romania SA, wrote in a note today.
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