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Hancila, Volksbank: the leu won’t go down over the level of 4.5 lei/euro if Cyprus gets out of the Euro zone

The national currency will depreciate on a short term until the crisis is resolved in Cyprus, but it won’t go down below 4.5 lei/euro if the country gets out of the euro zone, Melania Hancila, the head of strategy and research department in Volksbanks Romania says. The National Bank of Romania (BNR) published on Friday an exchange rate of 4.4286 lei/euro, the highest level reached since the beginning of the year.

 

Melania Hancila says that the situation in Cyprus is not likely to take the exchange rate over the maximum historical level reached last year, of 4.681 lei/euro. “Romania offers good yields, has political stability and has an underway agreement with the IMF, so I don’t think the leu will go down below the level of 4.5 units/euro. The depreciation will be on short term, until the issues in Cyprus are resolved”the head of the strategy and research department in Volksbank Romania said.

 

The investors on the financial markets are careful about the situation in Cyprus, where the Parliament will discuss a plan for the reform of the banking system and impose losses for the big deposits, after the Central European Bank on Thursday warned that if there is no support on the part of the EU and the IMF they will stop access to the credit institutions for the Cypriote institutions and will lead to emergency liquidity.

 

We expect the tendency of depreciation keeps going on due to the unfavourable feeling on the foreign markets. However, we think that the depreciation potential of the leu is limited, down to 4.44 lei/euro, as reaching this level could lead to foreign currency intervention or at least it would strengthen the worries connected to it”the ING Bank analysts Mihai Tataru said, quoted by Mediafax.

 

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