The Americans' view is shared by increasingly more analysts, but so far leu strengthening forecasts have been more reserved. The NBR on Friday calculated an exchange rate of 4.2048 lei per euro on Friday, 1.16 bani (1 leu - 100 bani) more than the previous rate, with the depreciation being determined by a new wave of investor risk aversion worldwide, following the Japan catastrophe. The leu had recorded a nine-month high on March 8, at 4.1869 lei/euro, almost 2% less than at the end of last year. The inflation leap in February prompted many to believe the NBR (National Bank of Romania) will encourage a leu strengthening, which would counter the pressures of fuel and food becoming more expensive internationally. "We acknowledge that a slowdown in inflation in the second half of 2011 and our bullish view on the RON, targeting euro to reach 4 lei by the end of the year, make a strong case for rate cuts. However, inflation outlook is not that benign looking beyond the favourable base effect (VAT hike in July 2010). We expect inflation trending to 6% during next year, on the back of a reviving domestic demand, with the risks on the upside due to food and fuel prices," note JP Morgan analysts. In turn, Royal Bank of Scotland analysts write in "trip notes" after a visit to Bucharest that the euro could fall to 4.1 lei over the next six months. "The Central bank has been selling euros recently, probably aiming for a stronger currency in view of worse than expected inflation numbers. We think that the 4% per annum positive carry of six-month forwards is attractive if the low volatility leu environment continues," says Demetrios Efstathiou, analyst with the Royal Bank of Scotland.

The Americans' view is shared by increasingly more analysts, but so far leu strengthening forecasts have been more reserved. The NBR on Friday calculated an exchange rate of 4.2048 lei pe