Central bank wants stable exchange rate as it easily influences prices
The National Bank of Romania (BNR, the central bank) is concerned with the stability of the exchange rate of the national currency leu, as its volatility is easily translated to prices, with a particular feature of a lesser impact of appreciation, compared to a nearly double impact of depreciation, BNR Governor Mugur Isarescu declared on Wednesday, upon presenting the quarterly report on inflation.
Isarescu mentioned that the current appreciation of leu against other currencies is circumstantial, generated mainly by the capital inflow on the background of the crisis in Ukraine.
He pointed out that the free floating of the exchange rate is not fit for a country like Romania.
'It's not very easy when the exchange rate oscillates that much. A very important appreciation can close down a factory, while the subsequent depreciation does not open it again immediately,' the governor explained.