Why is the leu feeble?
“The political skirmishing that heats up ahead of presidential elections, the stand-by agreement with IMF and economic uncertainties put pressure on the leu. By the end of the year, things aren’t expected to change drastically, but it will be more difficult in the early 2010 because time has been wasted”, said Laurian Lungu, managing partner of Macroanalitica.
Under these conditions, “a mild strengthening of the leu is expected for early 2010, after the required measures to meet the IMF conditionality are in place”, said Lucian Anghel, senior economist at Banca Comerciala Romana.
UniCredit Tiriac Bank’s senior economist Rozalia Pal shares the same opinion, saying the leu is likely to regain ground in early 2010, but uncertainties and devaluation pressures will persist through in early 2010.
“Devaluation pressures will persist both for the local currency and for its regional peers. Our projection is 4.3lei/euro for year-end, and we already taking into account a potential delay in the disbursement of the third tranche of the IMF aid package, and this is already factored in the depreciation pressures over the leu”, said Rozalia Pal.
Citi analysts expect a moderate appreciation of the leu in 2010 and say the important thing at the moment is the installation of a new government after the presidential elections, so as the IMF and European Commission to resume the agreement after a possible delay for the second assessment scheduled for December 2009.
Under these conditions, “a mild strengthening of the leu is expected for early 2010, after the required measures to meet the IMF conditionality are in place”, said Lucian Anghel, senior economist at Banca Comerciala Romana.
UniCredit Tiriac Bank’s senior economist Rozalia Pal shares the same opinion, saying the leu is likely to regain ground in early 2010, but uncertainties and devaluation pressures will persist through in early 2010.
“Devaluation pressures will persist both for the local currency and for its regional peers. Our projection is 4.3lei/euro for year-end, and we already taking into account a potential delay in the disbursement of the third tranche of the IMF aid package, and this is already factored in the depreciation pressures over the leu”, said Rozalia Pal.
Citi analysts expect a moderate appreciation of the leu in 2010 and say the important thing at the moment is the installation of a new government after the presidential elections, so as the IMF and European Commission to resume the agreement after a possible delay for the second assessment scheduled for December 2009.