Romanian Leu Weakens the Most in Six Weeks as Government FallsAndras Gergely
The Romanian leu weakened the most in more than six weeks against the euro and stocks fell after the government was toppled in a no-confidence vote.
The leu depreciated 0.4 percent to 4.3962 per euro by 3:58 p.m. in Bucharest, the biggest intraday slump since March 15 and compared with a record low of 4.4012 in June 2010. The country’s benchmark BET index slid 0.6 percent to 5,317.58 as Fondul Proprietatea SA retreated 1.6 percent.
The opposition Social Democrats and Liberals were backed by 235 legislators in the 460-seat Parliament in the vote on the government. The ouster may complicate the International Monetary Fund’s review of a precautionary accord with the country as Romania tries to reassure investors it will keep fiscal discipline.
“From a market perspective the positive is that all the main political parties have expressed support for the IMF programme,” Timothy Ash, a London-based strategist at Royal Bank of Scotland Group Plc, wrote in an e-mail today. “Albeit clearly the flux in Romanian politics reflects the strains of forcing through fiscal adjustment and structural reform.”
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