Isărescu: Slight exchange rate fluctuations should not be apparent in prices

Fluctuations of up to 3-4% of the exchange rate should not be "paid attention to" and should not be immediately apparent in prices, says Mugur Isărescu, governor of the NBR (National Bank of Romania).
The governor's reaction comes at a time when analysts believe the NBR is selling foreign currency on the interbank market to appreciate the leu, specifically in a bid to counter inflationary pressures brought about by the fact that oil and food have become more expensive on international exchanges. The leu has gained 1.3% against the euro this year, reaching a nine-month high.
"1-2% exchange rate fluctuations should not be immediately apparent in prices. I think prices in Romania will become much more independent from foreign trends," said Isărescu on Friday night at the ceremony where he received the Legion of Honour from the President of France, presented to him by the French ambassador, in a ceremony organised at the French Embassy in Bucharest.
Asked if the appreciation of the leu is justified by economic fundamentals, Isărescu answered that up to 3-4% fluctuations of the exchange rate should not be paid attention to. However, the fluctuation band specified by the governor is quite wide. Starting from the 4.26 lei/euro exchange rate recorded at the end of last year, a plus/minus 4% band would correspond to a 4-4.4 lei per euro interval. This in fact has been the band of fluctuation for the exchange rate from the beginning of 2009 until now.