My prediction about the exchange rate
The exchange rate could recover in the next few days at values of less than 5 lei for one euro, after passing this psychological threshold on Tuesday, appreciated the economic analyst Dragoș Cabat, a member of the CFA Board of Directors, co-founder CABAT & PAH INVESTMENTS.
« For me it is a little unexpected. I also talked about the main effects of its volatility in the Romanian political life and among the things that I said would remain unchanged was the exchange rate, because my feeling was that the national bank, on the one hand, has enough reserves on the other, as it has always been in the city. Political volatility means that it was a great pressure on the exchange rate and probably in the following days it will go back to 5 lei/euro. From Romania to move on to a depreciation of the lion, because the lion still appreciated relatively to the euro and dollar face, compared to all other coins in real term, by the fact that our inflation was always higher than that of developed countries and yet the exchange rate remained constantly 5 to 6 years, ”Dragoș explained.
He stressed that this could be the time of a lion’s shock beyond the threshold of 5 lei, although it would not go on this variant, at least in the short term, until June.
« If we also have a depreciation of the exchange rate, in addition to political volatility, and especially with very bad possibilities to slip into isolationism, to break the connections with the European Union, if we take into account the inflation we have, the largest in Europe, if we take into account the whole internal and international, economic and political context, then we would be very close to us. The country rating, which would be a very bad news.
