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February 23, 2024
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Economy Finance Romanian News

Romanian Currency Leu Plunges to an All Time Low

Romanian Leu – RON plunges to an all time low. The National Bank of Romania quoted 1 EUR at 4.92 RON, which is an all time low record for the parity between the two currencies.

This happens with the USD as well: on March 23, Romanian Leu plunged to an all time low record against the American dollar, with a parity of 4.53 RON for 1 USD.

Specialists from the National Bank of Romania explained that Romanian Leu is under the same pressure as all the currencies from the emerging markets in the region. Also, NBR stress it that Romania still has an unbalanced trade, with more imports than exports and this leads to the need for EUR and USD.

Regarding some other causes for this plunge, let’s not forget the emotional implications. For the third day in a row, in Romania thousands of protesters took to the streets, asking for the restrictions to be lifted. Moreover, some protesters ask for the resignation of the Government and the trust of the people in the authorities hit a low record in March, according to the opinion polls.

Still, economists warned at the beginning of the year that by the end of 2021 the parity will be 1 EUR for 5 RON. As seen so far, Romania is on the 5 RON for 1 EUR collision track and it will hit this psychological level sooner than the most pessimistic predictions. Apart from this, while all the imports become more expensive, the imported products will cost more. Also, the services whose cost is calculated in EUR, including the mobile phone subscriptions, will cost more

On the other hand, a weak Romanian Leu help exporters and Romania could improve its trade balance while having a weak domestic currency. Some of the most developed countries in the world, such as Switzerland, take a huge advantage out of a weak local currency. Switzerland does everything to keep its Swiss Franc at the lowest level possible.

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