Unlike other Eastern European countries that allow for greater exchange rate flexibility, Romania has used the stability of its national currency \u2013 the leu as an anchor against inflation, which is already extremely high. Any depreciation of the leu is reflected in retail prices, utility bills, or the bank interest rates people must pay if they have a loan. However, amid the current political crisis in Bucharest, the Romanian national currency, the leu, has continued to depreciate against the euro and reached a new all-time low on Wednesday: 5.26 lei, up 5 bani from the previous rate.<\/p>\n
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Over the past two weeks, the exchange rate has risen by 3.5%, after remaining flat since the beginning of the year. The national currency also lost ground against the U.S. dollar, which was trading at 4.47 lei, up from the previous session. The price of gold also rose, one gram reaching 676 lei, up from 653 lei in the previous session. In contrast, the Bucharest Stock Exchange defied the political turmoil and closed Wednesday\u2019s session higher, with the main index, the BET, rising by over 1%. Shares of Electrica, a key player in the electricity distribution and supply market, rose by nearly 10%, while Romgaz shares, the largest producer and main supplier of natural gas in Romania, gained 2.7% after announcing that it would take over Azomure\u015f, the country\u2019s largest fertilizer producer. Against this backdrop, the interim Finance Minister Alexandru Nazare stated that he had held several discussions with representatives of the financial rating agency Fitch Ratings regarding the political situation in Romania following the fall of the government led by the Liberal Ilie Bolojan. Minister Nazare emphasized that the Romanian authorities must maintain constant dialogue with all rating agencies to avoid damaging perceptions of the country\u2019s economic stability.<\/p>\n
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It is worth noting here that, in fact, over the past year or so, the austerity measures imposed by the Bolojan government have been driven solely by the need to reduce the country\u2019s deficit, the largest in the European Union, in order to avoid, as it was said, Romania\u2019s downgrade to \u201cjunk\u201d status, which is not recommended for investment. Alexandru Nazare warned that Romania must continue to meet the fiscal and budgetary targets and the commitments made through the European Commission and the National Recovery and Resilience Plan (NRRP), despite the current political interim period. \u201cThe fiscal and budgetary trajectory must not be neglected; we must not send a signal of derailment. In fact, the European Commission, agencies, and investors are extremely attentive and concerned about what is happening in Romania today,” said the interim Finance Minister. He insisted that all projects related to the National Recovery and Resilience Plan must continue without delay. Regarding the evolution of the leu-euro exchange rate, he assured that the National Bank of Romania is doing everything it can “to keep things under control.” (LS)<\/p>\n","protected":false},"excerpt":{"rendered":"
Unlike other Eastern European countries that allow for greater exchange rate flexibility, Romania has used the stability of its national currency \u2013 the leu as an anchor against inflation, which is already extremely high. Any depreciation of the leu is reflected in retail prices, utility bills, or the bank interest rates people must pay if […]<\/p>\n","protected":false},"author":109,"featured_media":1014732,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37738],"tags":[115946,39554,170405,168865,190342],"coauthors":[115219],"class_list":["post-1014815","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-today-in-the-news","tag-bnr-2","tag-depreciation","tag-leu-2","tag-pnnr-2","tag-rating-agency"],"acf":[],"yoast_head":"\n