Analysts: Don't get carried away by RON appreciation

The RON’s appreciation over the last two weeks will soon run out of fuel, amid high demand for foreign currency on the market, while the optimism of foreign players is short-lived, warn Romanian analysts. Since the end of March, the RON gained over 3% against the euro, with the exchange rate falling on the forex market from 4.3 to 4.15 RON for a euro. Yesterday was the second day of major correction in the last two weeks. After the euro had hit a three-month low on Monday, at 4.15 RON, exchange rates climbed towards 4.19 yesterday on the forex market. The official exchange rate, calculated by the NBR, climbed by 1.43 bani (100 bani equal 1 RON) to 4.1827. “Before the euro approaches the 4.1 RON mark, it will more likely go back towards 4.2-4.25 RON,” says Florian Libocor, chief economist of BRD-SocGen. However, he says a toning down in the negative perception of Romania on the foreign markets can be noticed, following the agreement with the International Monetary Fund, which made room for the RON to appreciate. “The investors’ sentiment is very unstable in times like these. Over the last few days, emerging currencies, the RON included, benefited a lot from the G20 meeting. However, this optimism can be quite easily diluted as less than encouraging economic data continue to emerge,” says Catalina Constantinescu, senior economist of RBS Romania.