Market ready to take euro to 3.45 RON

The RON has resumed its trend to appreciate against the euro, backed by capital inflows from non-residents, once the NBR has proven it aims to maintain high interests on the monetary market and is willing to purge large volumes to achieve this. The euro lost 2.44 bani (1 RON equals 100 bani) yesterday, with the NBR calculating an exchange rate of 3.4814 RON/EUR. The RON/EUR rate has gone down by a little more than 5% since the beginning of the year. Early last month, the euro was still above 3.6 RON. The exchange rate, however, went down below 3.5 RON twice in the last seven sessions. The dealers are now saying that the market is determined to take the euro even farther down, though an intervention on the part of the NBR is expected when the euro reaches 3.45 RON. “Hefty volumes were traded, due to both the domestic and especially to the foreign clients. We expect new declines, though nothing aggressive. I see an NBR intervention when the euro reaches 3.45 RON/EUR, but that remains to be seen,” a dealer commented. The interbank forex market opened at 3.9450/3.4980 RON/EUR rates yesterday, the level they had reached at Monday”s close. The euro gradually lost ground yesterday, ending at 3.4775/3.4825 RON. The overall feeling on the market is that the exchange rate will continue to appreciate; yet dealers also expect slight adjustments, seeing as the number of players has increased and some may decide to cash in on their profits. ZF