Euro slides to new low of the year, dollar falls back below the 3 lei threshold

The NBR calculated an exchange rate of 4.1843 lei for an euro, 2.05 bani or 0.49% below the previous level, setting thus a new nine-month low.

In parallel, the dollar lost 6.09 bani or 1.99%, going down to 2.9947 lei, the lowest level registered since last March. The strengthening leu against the dollar has a direct impact over fuel prices, as oil prices are dollar-denominated.

The strengthening leu is good news as it should help dampen the shock of rising oil and foodstuff prices internationally, where quotes have almost doubled from last summer. Pressures are already being felt domestically, with inflation climbing to 7.6% in February, particularly on the more expensive foodstuffs.

However, a stronger leu is causing headaches to exporters, which should hike foreign currency calculated prices, which would dent their competitiveness, though.

Just like in the previous leu growth episodes, the falling leu/euro rate came amid some very low trading volumes, and dealers are unable to decide whether the move was driven by a new discreet intervention of the central bank or exclusively by private financial flows.