Romanian Leu: New negative record held back only by the elections
The Romanian Leu, the national currency of the country (symbol RON), reached a new negative record on November, 19th. To buy one Euro, 4.7750 Lei are now required after the change had crossed the psychological barrier of 4.77 (4.7729, to be precise) the day before.
They are small but significant variations, given the pressures to which the Romanian Central Bank (BNR) is subjected due to the Presidential Elections. Both candidates, in fact, one supported by the Government and the other supported by the Parliament, do not want currency shocks from the Romanian Leu, until the second round takes place on November 24th.
In fact, according to many experts in the sector, Romania has long been in a financial impasse. For at least two years, the ruling parties led by the PSD (roughly equivalent to our center-left) have developed a populist-type economic policy aimed at gaining support by increasing pensions and state salaries. The inevitable increase in costs for companies and the fear of the growth of private employees’ wages is then holding back investments by companies, especially foreign ones.
On the other hand, the coalition of parties that has just set up the new government (always to make a comparison with Italy, a sort of center-right) fears having to pay the bill for increases at the end of the year. The result is that the newly installed ministers have announced a policy of cuts in public spending and therefore of personnel in the Public Administration who does not envisage a peaceful Christmas for many families.
Unlike the Romanian Leu, foreign currencies such as the Euro are, for many Romanian families, a safe haven as there are still many who depend on those who left the country to go abroad to work. Obviously, in these situations, we tend to avoid, as far as possible, to change currencies dollars and euros with the Romanian Leu.
The situation is expected to change drastically towards Christmas, when many Romanians will return home to spend the holidays with the families of origin.