Romania Leu’s Stability In Sep Fueled By Up To EUR900M From Ctrl Bk - ING

Romania's central bank is estimated to have injected between EUR400 million and EUR900 million in the money market to keep a stable exchange rate for the leu, a report from the ING Bank released Monday showed.

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"If needed, this pattern is expected to continue, suggesting the EUR/RON stability will continue," ING analysts said.

According to the report, the central bank could face difficulties in sheltering the leu on the long-term, due to possible "complications" expected in 2012 and afterwards.

"Unless global and local situation improves to a great extent, then the leu may weaken versus the euro at the same time with a significant fall in foreign currency reserves (starting 2012 Romania has to repay loans from International Monetary Fund and European Commission)," ING said.

Additionally, the leu's weakening may be aggravated by the fact that not just the private sector is indebted in foreign currency, but also the state has borrowed more in hard currency than local currency over the past period, the bank said.

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