Money market rate rebound makes leu lose some ground
BUCHAREST (Reuters) – Romania’s leu ended near eight-month highs against the euro yesterday, helped by fresh buying from investors seeking to benefit from a rebound in money market rates, dealers said. Markets resumed trading after a prolonged three-day Orthodox Easter break and the central bank (BNR) pumped excess funds out of the market, soaking up 6.56 billion lei of one-month deposits at a rate of 8.5 percent at its liquidity-draining operations. Overnight rates surged to 7.14/8.43 percent against Friday’s 0.71/2.68 percent following BNR’s moves. Dealers said the leu hit an intraday low of 3.46 per euro, its main reference currency, and bounced back to firmer levels by close as investors started to buy lei following the increase in rates. The leu gained ground on Friday to hit 3.4550 per euro, its strongest level since last August. Market watchers had said there was not a high risk the BNR would intervene to halt the currency’s rise before it hits 3.4 per euro, the level it reached last August, as the bank’s focus has turned to fighting inflation. The leu has gained around 6 percent to the euro this year.
