Monday, January 5, 2004. The single European currency was quoted at 41,252 ROL by the National Bank of Romania, only to soar to a new record-high on Monday, January 6: 41,438 ROL. Monday, March 1, 2004: the euro spirals down to 39,813 ROL. No one believed that the euro could change direction and drop below the 40,000 ROL level, but this is just another case when forecasts and reality clash.
The foreign currency surplus on the interbank market and the absence of a National Bank intervention as net euro buyer continued to support the appreciation of the domestic currency yesterday. Thus, the ROL gained more than 200 units against the euro, which dropped to 39,813 ROL.
Ever since the beginning of the year, the ROL has gained more than 3.2 percent against the single European currency, a surprisingly fast change. The new trend is all the more surprising since the ROL lost almost 18 percentage points to the euro last year, turning the European currency into the investors' darling.
Even if the Bucharest dealers and treasurers are rather surprised by the central bank's recent position towards the forex market, as they are puzzled by its intervention policy, National Bank officials yesterday hinted, for the first time this year, that nothing was random.
"The National Bank is now aiming to secure a relative stabilisation of the domestic currency, or, in other words, to make it more appealing. And we are doing this as the inflation target for 2004 is below 10%. What we can say now is that whoever bets on foreign currency at this point is in fact willingly bracing for the risks and uncertainties deriving from the turbulences exhibited by the EUR/USD exchange rate on the international markets," Adrian Vasilescu, advisor to National Bank of Romania Governor Mugur Isarescu told Ziarul Financiar.
Although the central bank could have easily slowed down the domestic currency's appreciation against the euro by merely making its presence felt on the forex market, the National Bank has adopted a rather reticent position since the beginning of the year, having bought a little over 80 million euros in two months' time.
The massive sales of foreign currency may have been caused, among others, by the fact that volatility may soon diminish in the ROL/EUR ring, as the National Bank control will be tighter, after the euro's share in the currency basket used by the central bank has been increased to 75 percent.
Also, interest rates for the savings in ROL are now yielding much higher gains than any other investment in foreign currency, which fuels the aversion to foreign currency, implicitly triggering sales.
When the trading session was opened, the banks quoted the euro at 40,030-40,060 ROL, but the foreign currency sales immediately pushed the single European currency down to 39,900-39,930 ROL.
oana.nuta@zf.ro
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