The exchange rate has been over 3.9 lei/euro for three days, showing a change in the fluctuation band to 3.7 - 4 lei/euro or to 3.8 - 4.1 lei/euro.

The exchange rate has been over 3.9 lei/euro for three days, showing a change in the fluctuation band to 3.7 - 4 lei/euro or to 3.8 - 4.1 lei/euro. I say it is probably because the National Bank has a disproportionate capacity of intervention in comparison to the volume of the market, making it extremely difficult to foresee the intervals of variation or the levels of exchange rate. Certainly, however, Governor Isarescu was right when he said that the flexible rate allows the correction of the super-appreciation of the national currency. Temporarily, the central bank cannot intervene significantly because its sales of foreign currency would make the banks lack in liquidity in a critical time.

Now, the huge current account deficit of Romania is very likely to be corrected. But, as far as the economic theory says that the external deficit is just a form of postponing the inflation, there is a risk for the inflation to return to two digits next year. During the current economic cycle I showed my concern about the fact that the most money of the foreigners went to the money market, stock exchange, and real estate, but not in industry or agriculture, making the inflation go down due to the appreciation of the national currency. Now it is time for the non-residents’ money to leave with the risk for the inflation to return to its initial point. If inflation fell in the years that have passed due to structural changes made by serious foreign capital, an appreciation of 20% accompanied by a depreciation in a similar percentage wouldn’t have been such a big thing, because the economy would have been competitive enough. Since we simply hid the inflation behind the currency appreciation, it is highly p