Greek problems and Poland's changed exchange rate approach, set to drive euro toward 4.2 RON

The Polish zloty’s decline in the wake of an unprecedented intervention by Poland’s central bank on the inter-bank market and a further deterioration of Greece’s situation have also hurt the RON, which returned to early February levels, with the exchange rate climbing in Bucharest to 4.15 RON per euro on Friday. The RON is likely to be further harmed by the situation in the region, with dealers even speaking of a 4.2 RON/euro rate, after until last week the financial markets of emerging economies in the region held well in the face of tensions generated by Greece’s financial woes. “(…) We did not feel panic on the market, but we cannot rule out seeing the euro again at 4.2 RON if bad news in the region emerge. For the time being, though, the euro seems more likely to stay at 4.15 RON,” says the dealer of an important domestic bank. On the interbank forex market, rates abruptly climbed during Friday’s session from 4.11 to almost 4.15 RON per euro.