“The Fund sees no reason for a change in FX policy. This suggests to us that the IMF is comfortable with the National Bank of Romania’s active involvement in the FX market to contain excess volatility. Against this backdrop, we expect the leu to stay in a range of 4.20-4.30 (against the euro) for the remainder of this year”, said Citi’s analyst, Ilker Domac.

In their prior forecasts, in January 23, 2009, Citi analysts heralded volatile evolutions of Romanian assets – especially the leu – until a clear signal of a macroeconomic program based on an IMF arrangement”.

After the initial announcement of the 20bn-euro package supported by the IMF, EU and several multilateral development banks, the local currency hiked to 4.27 lei/euro in early yesterday’s trades.