Blood everywhere! This is how players described the scene yesterday on the foreign currency market. It was the first day after NBR's official announcement that it would relax control over the exchange rate to allow it to grow and would not intervene to tighten control again, even in the event of a sharp drop in rates. This did not take long to happen: trading opened at 40,270/40,300 ROL to the euro, compared with 40,320 at Tuesday's close. At noon NBR calculated an exchange rate of 39,371 ROL/EUR, down 846 ROL on the previous day. Foreign currency sales also steamrollered the dollar, which found itself down to 31,278 ROL, 661 ROL lower than on Tuesday.
Figures aside, foreign exchange dealings were spectacular: record volumes were traded which saw bosses leaving their offices to sit in front of the trading terminals themselves; phones were left off the hook because of bewildered clients who could not believe their eyes - the ROL/EUR "prefix" had changed overnight from "40" to "39", something not seen for a year.
Those selling foreign currency for ROL almost had nervous breakdowns when they saw how little they got for their money. On the other hand, buying clients were simply ecstatic, even trying to delay their buy orders to take advantage of the decline.
"The true power of market forces has been shown. The predictability of the central bank's interventions must be forgotten," Cristian Popa, NBR vice-governor responsible for monetary policy, said yesterday.
These market forces did their job pretty quickly. Sales of foreign currency pushed rates to lows of 39,430/39,450 ROL to the euro. At one point, the exchange rate rose by 600 ROL due to large buy orders, but fell afterwards as quickly as it had risen to 39,750 ROL.
razvan.voican@zf.ro
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