Romanian leu depreciates amid political instability

Romanian leu as managed float regime has not been broadly commented on day-to-day basis. Romanian currency was unusually stable since 2022, with nominal depreciation below 1.0% per year, on average. On May 6th, however, Romanian leu depreciated to 5.095 against Euro around noon from 4.9750 in the morning on political turmoil after the first round of presidential elections. That marks roughly 2% depreciation within one day. We think that 5.10 is the new line in the sand for the National Bank of Romania. We have also adjusted our EURON forecasts and have the level fixed at 5.10 in 2025 and expect gradual depreciation toward 5.20 next year.