Deutche Bank tells investors to buy lei
The German bank believes that the Romanian currency has to be helped by the improvement of the economic basis and the potential support of the central bank.
The main risks assumed by the investors for the three-months deposits, in Lei, targeting a rate of four lei/euro, would be, in the opinion of the analysts of the German bank, the effect of contagion of the difficult situation on the other emergent markets, notably those in the Baltic countries.
According to Deutche Bank, the leu has been the most stable currency in the Eastern part of the EU, that has reported minor fluctuations, around the value of 4.2 lei/euros, starting in the month of March, when Romania contracted a credit of 20 billion euros from the International Monetary Fund, IMF.
„The fact that the blocking of crediting has been considerably reduced and that more convincing evaluation parameters are used suggests that the poor performance of the Leu should near its end,” reads a report of Deutche Bank.
The dealers are saying that the Central Bank of Romania, BNR, has repeatedly taken masked action in the hard currency market, in order to bar the depreciation of the national currency, under the level of 4.25-4.3 Lei/euro, and this could put a brake to reaching the inflation target of 2.5-4.3 Lei/euros, at the end of the year.
According to the dealers, this has also frightened many foreign players, and, at the same time, has made of the currency market in Romania, a less liquid one, compared with the markets around, mainly led by commercial orders from the local banks.
The analysts and the dealers believe that the intervention of BNR in the hard currency market and the bad situation of the current account have made the Leu not to be, this summer, in the trend of regional increase.
The Deutche Bank report also mentions that the economy of Romania gives signs that it would have reached a possible minimum. This, together with a market of crediting on the rise, against the background of governmental issues, could ensure foreign flows, which would support the Leu.
The level of support is regarded as a firm boost for the Leu, if one takes into account that Romania, alomg with Hungary, has the highest interest rate of monetary policy in the European Union, of 8.5 percent.