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The Euro reaches a new historical high: the rate set by the Central Bank: 4.7834 lei / euro
The Romanian leu fell to an all-time low against the euro on Thursday, amidst political uncertainty after the fall of the government led by Ludovic Orban.
Romania's central bank, BNR, set its reference exchange rate at 4.7834 lei ($1.07/1.0 euro) per euro on Thursday, 0.09% weaker than 4.7789 lei per euro on Wednesday.
On Thursday morning, the leu changed hands between 4.7827 and 4.7895 per euro, according to real-time interbank forex trading data published by information portal Conso.ro.
CFA Romania, an association of investment professionals, said last month that they expect an exchange rate of 4.8823 lei per euro in the next six months and 4.83 lei per euro in the next 12 months.
The leu has been weakening gradually since the beginning of the month, after parliament dismissed the centre-right government led by Ludovic Orban in a no-confidence vote in parliament requested by opposition left-wing Social Democrat Party (PSD), bringing closer the possibility of early election.
Shortly after the vote in parliament president Klaus Iohannis appointed Orban as prime minister-designate tasked with forming a transitional cabinet. Orban's second government will seek a vote of confidence in parliament on February 24. If parliament refuses to endorse Orban or a possible second nominee for prime minister, the president can dissolve parliament and call early elections.
Following the vote in parliament, Orban said that he will deliberately seek the rejection of the first two proposals of the president in order to trigger a snap general election that PNL hopes to win, as PNL is far ahead of PSD in recent opinion polls. President Iohannis too said he favours an early election scenario.
Fitch Ratings said after the fall of Orban's government that it is unclear whether possible early elections would result in greater clarity on policy steps to address the recent deterioration of fiscal and external metrics.