Euro surge joined by US dollar plunge to four-time low

Neverending nightmare for those unlucky enough to have euro-denominated credits or leasing contracts
In only three days (since the beginning of March), the ROL exchange rate against the single European currency has gained almost 1%.
Moreover, the euro has gained more than 3.1% since the beginning of the year. The euro surge, fuelled by the US dollar’s increasingly weaker position on the international markets, is very likely to continue, amid concern about a slowing US economy and the possibility of a US-led war against Iraq.
The dollar yesterday fell to $1.1003 per euro for the first time in four years, down from $1,0925 yesterday. “I don’t see anything troubling” about the dollar’s decline, Treasury Secretary John Snow said yesterday.
The euro ascension, which began as early as last year, is becoming painful by the day for those with EUR-denominated loans to pay, as the ROL depreciation is leaving all forecasts behind.
Practically, those that took credits in euros last year are already losing money, unlike those with ROL-denominated credits, especially since interest rates for ROL loans are following a descending trend.
Last year, many companies and natural persons took loans in euros and, in the case of leasing contracts, the euro became the dominant currency.
The euro appreciation against the dollar on the international markets is influencing the ROL evolution, with the domestic currency losing 112 units to the euro yesterday.
The National Bank of Romania calculated an exchange rate of 36,014 ROL/EUR, while for the US currency the exchange rate stood at 32,849 ROL/USD, down 18 units since yesterday.
Since the beginning of March, in only three days of trading, the ROL lost 322 units to the euro (0.9%), while the euro increase has exceeded 3.1% since the beginning of 2003. The ROL has gained 0.5% against the dollar this month and almost 2% since the beginning of the year. Still, related to a 60% euro-40% dollar currency basket, the Romanian leu has lost 0.5% this month and 1.18% this year, which can be deemed as acceptable considering the market’s evolution so far.
The dealers operating on the Bucharest interbank market did not see a very high trading volume yesterday, even lower than the day before, according to some. At the beginning of the session, banks posted EUR quotations ranging between 35,960-35,990 ROL. Pushed by the international developments, commercial banks issued Buy orders for euros, which sent prices up to 36,030-36,060 ROL/EUR.