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EUR reached a historic peak: RON 4.2127/EUR

The reference rate released by National Bank of Romania (BNR) reached an historic peak since the issuance of the European currency, RON 4.2127 / RON 1, the RON undergoing through the fifth significant depreciation session since the beginning of the year, against the background of negative feelings of investors towards the region.

The analysts think that an intervention of BNR in the inter-banking market in order to support the national currency will have a limited and short term effect, as long as the negative perception of investors on the region maintains, and RON continues the downward trend over the next time period.

BNR Governor, Mugur Isarescu, is concerned with the EUR evolution against the national currency, but he is aware that the fluctuations of the exchange rate, which reached historic levels, are not outside the economic framework and the trend will be kept under control, as PM Boc specified on Friday in a TV broadcast on the meeting with the official of the central bank in relation to the macro-economic forecasts and budget draft for 2009.

"It is not a situation that should alarm us, in the sense that it remains constant throughout the time period and it could follow an upward trend. It is an upper one, it will go down, it will go up, thus, it is specific to a market economy to a certain extent, and I am confident that the National Bank, through the monetary policy pursued, will be able to maintain the necessary balance", PM said.

The effects of depreciation

The outstanding debts at loans will soar should RON depreciation continues over a longer time period, and the rate stabilizes at a rate that is much too disadvantageous, according to bankers.

Alpha Bank president, Sergiu Oprescu, believes that the influence of RON depreciation will produce effects only after a few months, conditional upon the future developments both in the rate, and regarding the reference interest Euribor (the rate asked among the main banks in EUR zone for inter-banking deposits). The same reticence in speaking about immediate effects was also shown by Bancpost president, Mihai Bogza, although he admits that the situation has to be carefully monitored. At the same time, Adrian Vasilescu, advisor of BNR Governor, drew the attention to the fact that this rate was an instrument and not a medicine.

RON depreciation coincides with the beginning of a drop in consumption in the meat industry and it will have a direct impact on meat product price, since close to 70 per cent of the raw material used is imported and paid for, in general, in EUR, according to the producers, Realitatea TV informs.

The retailers in the Romanian market are affected only to a small extent by the depreciation of the national currency, considering that most of the suppliers are local companies, and for imports, the chain of stores have taken precautionary measures in the form of futures contracts and hedging policies. "We do not experience any effects for the time being. We import little and mostly in USD. And here, we have futures contracts", according to Andreea Mihai, Carrefour Romania marketing manager, for Mediafax.

In case of electronic appliances, electrical household appliances and IT&C, RON depreciation takes place against a background of decreasing sales, this market being affected by a lower demand because of the financial crisis.

RON depreciation raises the costs incurred by agricultural producers, who have investments with loans in EUR and this makes them think twice prior to designing new investment plans or to consider an EU funded project, which needs co-financing.

Analysts: Inflation in 2008 by 2 pc over BNR target

In 2008, inflation ranged between 6.5 per cent and 6.9 per cent, close to BNR most recent forecast, which was 6.7 per cent, but by two percent over the target, within the context of RON depreciation in the last part of the year offset the positive effects of reduction in the prices of non - food products, according to analysts. The estimations of the analysts regarding inflation in December indicate 0.48 per cent to 0.8 per cent on monthly basis, according to a survey conducted by Mediafax among six economists.

 

Sursa: http://www.nineoclock.ro

Tags: effects according depreciation bnr historic national reached