Isarescu: Exchange rate fluctuations in last days caused by emotions, not major transactions

The leu-to-euro exchange rate has been seeing accentuated fluctuations in the last days, at around 1 percent, amid the tensions in Greece, but they were not prompted by major transactions or capital outflows, they were rather caused by emotions, the National Bank of Romania's Governor Mugur Isarescu said on Wednesday.

"We see a relative accentuation of the fluctuations of the leu's rate of exchange amid the tensions relating to the situation in Greece and the volatility in the international financial markets", the central bank head stressed.

He explained that the central bank usually avoids making remarks on the evolution of the exchange rate, but this time around it made an exception, given the international context and included such observations in the release issued after the monetary policy meeting.

"We've seen this higher volatility of the exchange rate, movements of 4 bani [0.04 lei], which otherwise would not be normal, they equal one percent. Movements of one percent, of one cent, between the euro and the dollar are recorded every few weeks, frequently, but they were pretty scarce in the case of the leu. We've seen it can happen with us too. So that the impact [of Greece situation on the exchange rate] exists. We found no reasons for it, the market was thin, there were no transactions, capital outflows were minor. Consequently, our definition is that this volatility, this fluctuation had emotional reasons mostly. [The leu] then went back also on its own", Isarescu underscored.

The National Bank chief said such fluctuations were also possible in the upcoming period.

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