* Analyst Florin Cîţu: "The fluctuations of the exchange rate over the last two months, do not reflect the strength of the economy, amid greater inflation".
Yesterday, the Euro reached a 13-month against the leu for the second time. The Romanian Central Bank (NBR) yesterday posted an exchange rate of 4.0735 lei/Euro, a level which hasn"t been reached since March 13th, 2010, when the Euro was quoted at 4.0729 lei.
The gains of the leu against the Euro, even though they may not have immediate effects, has some long term benefits and drawbacks.
On a macroeconomic level, the strengthening of the leu will help the Central Bank control inflation, which caught up speed in March and reached 8%, as a result of the increase in the price of fuel and food. Under these circumstances, governor Mugur Isărescu said that the NBR will revise its inflation forecast of 3.6% a year upwards.
Last week, the governor of the Central Bank said that the strengthening of the leu is hard to counter, as the interest rates are difficult to cut, and there is excess liquidity in Romania. Some analysts are worried about a speculative attack aimed at appreciating the Romanian currency.
Other analysts consider that the benefits of the strengthening of the leu will be felt predominantly by those who have loans in Euros and by foreign investors, whereas Romanian exporters will be hurt.
Economic analyst Călin Rechea said that borrowers with loans denominated in Euros could see a benefit, but this will depend on their salaries, because they may be put in a difficult position of repaying their loans.
In his opinion, the Central Bank may have started this strengthening of the leu, and others followed suit, but regardless of its cause, this strengthening is forced.
Călin Rechea said that foreign investors will also benefit foreign investors, who stand to gain
