The RON has the strength to appreciate as much as to reach a parity of 3.0 RON/EUR before the adoption of the euro, scheduled to occur between 2012-2014, some analysts believe, while others consider such a scenario unlikely, stating that such an appreciation would not be possible to support by productivity gains, which make it sustainable.

The RON reached a new four-year and seven months peak on Friday increasing to 3.23 units, 1 ban (100 bani - 1 RON) below the official exchange rate of 3.2395 RON/EUR announced at midday, by the NBR. In the morning, rates fell to less than 3.24 RON/EUR fuelled by an interest in RON from foreign investors.

The most optimistic exchange rate forecast comes from Paul Prodan, the head of the Treasury of Credit Europe Bank. He believes the euro will reach 3.0 RON as soon as the end of this year, pressured by significant inflows of foreign currency. On the one hand, direct investment will be fuelled by privatisations in the energy and automotive field, while speculators' appetite for RON remains high. Eugen Radulescu, former CEC chairman, is one of the analysts who is most optimistic about the RON's capacity to appreciate against the euro, having anticipated at the beginning of this year that the exchange rate could fall to less than 3 RON/EUR over the next three to four years. Radulescu has recently adjusted his exchange rate forecast for this year from 3.20-3.25 RON/EUR to 3.15-3.20 RON/EUR.

"We believe the 3.0 RON/EUR exchange rate will be attained by the time the single European currency has been adopted, with the central parity to be set around this level," Florin Catu, ING's chief economist. NBR estimates entry into the exchange rate mechanism, ERM II, which entails fluctuations of the exchange rate within a band of plus/minus 15% around a central parity, will occur between 2010-2012. However, there still remain sup