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Romanian leu hits all-time low amid protests, political turmoil
The Romanian leu weakened to an all-time low against the euro on Tuesday due to unrest caused by protests against government plans to introduce controversial changes to the fiscal and judicial system, seenews.com informs.
The central bank, BNR, set its reference exchange rate at 4.6551 lei per euro on Tuesday, 0.18% weaker than 4.6469 lei per euro on Monday. On Tuesday morning, the leu changed hands between 4.6470 and 4.66 per euro, according to real-time interbank forex trading data published by information portal Conso.ro.
On Sunday, a couple of thousand people rallied in Bucharest and other Romanian cities to protest against an emergency decree introducing changes to the fiscal code that was issued by the government at the beginning of November as well as against government plans to appoint Romania's chief prosecutor without the consent of the president.This was the third straight Sunday of protests in Romania.
On November 8, Romania's governing coalition comprising the Social Democratic Party (PSD) and centre-right Liberal-Democrat Alliance (ALDE) approved an emergency decree to change the country's fiscal code starting January 2018.
The changes, which have drawn fire from businesses, stipulate that workers will have to pay the social security contributions currently paid by employers, while income tax will drop from 16% to 10%. In the view of employees, the changes will not increase their net salaries, as the government claims, and will only complicate their fiscal position.
At the beginning of November, businesses and Romanian president Klaus Iohannis asked the governing coalition to abandon the planned tax changes which in their opinion will lead to fiscal chaos. People also protested against against PSD's plans to make possible the appointment of Romania's chief prosecutors by the justice minister, without the control of the president.
Romania's second-largest political force in parliament, opposition National Liberal Party (PNL), is expected to decide on Wednesday when it will file a censure motion this week over the emergency decree. PNL also intends to challenge the decree before the Constitutional Court.
However, a censure motion has little chance to pass, as PSD controls 220 of 465 seats in parliament, while their government coalition partner ALDE controls a further 23. PNL has 99 MPs, while the centre-right Save Romania Union (USR) and the centre-right Popular Movement Party (PMP) have 43 and 24 MPs, respectively. The Democratic Alliance of Hungarians in Romania, which usually backs the PSD-ALDE coalition government, has 30 seats. National minorities have 17 seats and independents hold nine seats.