The shocking bearish evolution of the local currency, now to all-time low versus euro, will likely continue, as long as the Government doesn’t come forward with a plausible budget plan. Who are the losers in this currency crisis? The losers are importers who now pay higher amounts for same loaded inbound containers coming from the Euro area, against very few winners, with the mortgage rates notching up, and costs of services expressed in foreign currency scaling up.

National currency closed this week’s trades on red, the euro being equated to 4.25 lei in international trades.

During Friday’s session, the leu took a nosedive down to 4.175 units/euro, up to a top exchange rate of 4.24 lei/euro, reported at 14:15. Later on, the local currency took a leap forward, up to 4.2250 units/euro in the closing trade.

Through the year 2008, the leu lost a roughly 10.35% of its value against the euro versus prior year, down to 3.6827 lei/euro median. The leu’s slide is dramatic for persons or companies who contracted loans in the summer of 2007, when the local currency hit 3.1 high against single European currency.

Dragos Cabat, Managing Partner of Financial View advisor, said that a shocking plummeting of the currency always took importers by surprise, only if they hadn’t previously shielded positions by euro-based hedging. “Sharp wide-bandwidth fluctuations are dangerous for economy in general, both to importers and exporters, by the shocks they trigger over clients and short-term sales”, Cabat told Wall-Street.

Skyrocketing loan rates. There is a 35.4% fluctuation between this low and all-time high reported by BNR. However, the central bank had repeatedly warned on the currency risk that people are exposed to by borrowing in foreign currency.

For banks, the meltdown of the leu speeds up the deterioration of credit portfolios in foreign cu