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Isarescu: the leu depreciation was unavoidable after two years of productivity deterioration

The leu depreciation was unavoidable after two years when the productivity was strongly diminished, and the productivity accumulated previously was completely eroded, the BNR governor Mugur Isarescu says; we should be satisfied that, at present, the exchange rate has not gone upper.

"We have seen, over the last two years, a strong deterioration of productivity and the complete erosion of the reserve of competitivity previously accumulated, the increase of exchange rate being unavoidable.

We have to be satisfied that the leu has not depreciated further, as the variation of the exchange rate is not higher than plus-minus 25% while in other countries in the region the variation was plus-minus 40%, the governor of BNR said. On the other hand, Isarescu admitted that BNR did not have the necessary information to counterattack the trend of the market " to head to less productive investments, such as land and residences, trend which has been in favour since 2002 - 2003". The public message has changed, everybody wanted more consumption, the retail brought less profit" Isarescu added.

He mentioned the exchange rate as a channel through which the effects of the financial crisis could affect Romania, together with the commercial channel, 25-30% of the GDP of Romania being made up of exports, which now have dropped due to the lack of markets and the financial channel under the conditions where foreign financing was brutally limited.

 

Sursa: http://www.actmedia.eu

Tags: productivity isarescu years unavoidable bnr

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