THE EURO AT AN ALL-TIME HIGH
BURSA 14.11.2017

A.A. (translated by Cosmin Ghidoveanu)
 
mărește imaginea
     * Vasilescu: "We cannot say that the currency market has gone off the rails, the exchange rate has moved 4 bani in 4 days"
     * "Perhaps it is a simple coincidence the fact that on November 8th was approved the Emergency Ordinance of the Fiscal Code and it was also on that day that the Euro rose past 4.6 lei", said Mr. Vasilescu
       The leu yesterday reached a historic low against the Euro, 4.6495 lei/Euro, up 1.05 over the previous meeting, marking the fourth day where the exchange rate was above 4.6 lei.
     Adrian Vasilescu, strategy consultant at the National Bank of Romania, thinks that the leu is weakening to support the balance of payment, which is seeing a deficit of 8.2 billion Euros on the goods side, in September.
     He said: "There are four days in which the exchange rate for the Euro has exceeded 4.6 lei. Over the last few days the exchange rate has dropped by one ban. Perhaps it is a simple coincidence the fact that on November 8th was approved the Emergency Ordinance of the Fiscal Code and it was also on that day that the Euro rose past 4.6 lei.
     It is never correct to draw a conclusion about the trend of the exchange rate, after just a few days.
     Thus, I propose that we review a different threshold, to draw conclusions, respectively that of 4.59 lei. That level has been tested several times, but it was reached on August 29th, and since then, the exchange rate has stayed at that level until September 29th, and then there have been some fluctuations, until November 8th, when it rose to 4.61 lei.
     We have seen such depreciations before, because we are going to comment the exchange rate of 4.59, because it is a longer stage".
     The main cause of the moves in the exchange rate is the evolution of the balance of payments, says Mr. Vasilescu: "11 indicators lie behind the exchange rate, including inflation, the GDP, the interest rate, economic efficiency, unemployment, but the most relevant indicator is the balance of payments".
     The current account of the balance of payments has seen a deficit of 4.191 billion Euros, in the first nine months of this year, up 45.27%, compared to the similar period of 2016, according to data of the National Bank of Romania (NBR), published yesterday.
     On the goods side, we have a deficit of 8.2 billion Euros, according to NBR data.
     The deficit of the trade balance in the first nine months of 2017 has reached 8.8 billion Euros, 1.9 billion Euros higher YOY, according to data published last Thursday by the National Statistics Institute.
     According to Mr. Vasilescu, the question is who will make up the deficit of the balance of payments: "One part will be covered through European funds, who may or may not come, another, out of capital inflows, which are extremely rare, meaning that a major portion is balanced through the exchange rate, which is weakening, in order to support the balance of payments.
     That is where I see the main cause of the depreciation of the leu".
     According to Adrian Vasilescu, we had an increase in consumption based on wage increases and the low interest rates: "Under these circumstances, we are resorting to imports, even the food imports are rising, and the balance of trade needs to be stabilized".
     The official of the NBR states that the Central Bank is monitoring the foreign exchange market very carefully, but it has no target for the exchange rate, but it always targets financial stability, which means ensuring the stability of the currency market: "How does it do that? Through assuagement, through all the means it has at its disposal.
     Sometimes, the NBR can just rattle off the currency reserves and the market calms down, because the players in the market know that the NBR is the most powerful player and can at any time make the market go the other way if they go crazy. «Crazy» means that the depreciation or the strengthening of the leu is fictitious. The National Bank usually intervenes with every means in such cases".
     When asked if that is the case in the present, Adrian Vasilescu responded: "This time it hasn't gone crazy. The exchange rate has moved 4 bani in 4 days".
     Analysts think that there is a concern on the currency market, amid the fiscal measures adopted by the Government espite the criticisms of businesspeople and unionists. To that, it also adds the analysts, inflation, as well as the trade balance and the capital flows which are very low.
     The euro/leu exchange rate has reached a relatively low balance, said on Thursday, the NBR governor Mugur Isărescu said, and mentioned that the evolution of the leu is tightly connected to the trade deficit.
     The level which the exchange rate has reached represents a disaster for exporters and importers, says Mihai Ionescu, the president of the Romanian National Association of Exporters and Importers (ANEIR). He said on Wednesday, that even though, for a moment, exporters should be happy that they earn more, nevertheless, given that 2 thirds of exported products are made using imported materials, that exchange rate will remove them from the international competition. 

     Lazea: "The criteria concerning deficit, inflation and interest rates, in danger when it comes to the adoption of the Euro"
     The criteria for the adoption of the Euro pertaining to the budget deficit, inflation and interest rates over the long term are in danger, said Valentin Lazea, chief-economist with the National Bank of Romania (NBR) and secretary of the Committee for the preparation of the move to the Euro.
     "The fiscal and salary relaxation policies that began in summer of 2015, and emphasized between 2016 and 2017 by governments of various political orientations, such relaxation policies are making it difficult to meet the nominal criteria. The biggest overshoot danger is the deficit of the consolidated budget, which is at the level of 3% of GDP and which, according to the forecast of the European Commission, is at risk of reaching 3.9% next year, unless measures to mitigate that aren't taken", said Lazea, quoted by Agerpres.
     According to the quoted source, it is not only the criterion of the consolidated budget deficit that is in danger.
     The NBR official further said: "There are two criteria which we are at risk of failing to meet starting next year because of these pro-cyclical policies. These are the criteria referring to inflation, that harmonized consumer price index, and the one concerning the long term interest rates. The inflation criterion is a moving target which, at the level of September, was 1.5 percentage points above 0.4%, which is the median of the three best performing states, in other words 1.9%. Romania had that criterion met in September. Let's assume this inflation criterion will be around 2% next year, except us, based on the current inflation growth forecast will exceed it in March 2018. Even if luckily for us, the criterion were to go to 2.5%, it would also be surpassed by mid-2018 probably, according to our forecasts".
     
     Lazea: "A potential submission of the bid to join the Eurozone would be rejected from the start, in a nearby future"
     According to Mr. Lazea, a potential submission of the application to join the Eurozone in the near future would be rejected from the start: "The continuation of the fiscal and salary relaxation in 2018 will endanger not only the meeting of the nominal convergence criteria, but also the compliance of the dashboard indicators monitored by the European Commission in the European Semester. If in 2014 and 2015 Romania used to meet 13 out of 14 indicators of the dashboard, tied with the Czech Republic and Poland, but much better than all the Western European countries, Romania currently meets 12 criteria, because last year the real estate price index passed the 6% threshold, and it will soon only match 11 criteria, because the index of individual labor cost will exceed 12% this year. In this context, an application to join the Eurozone in the near future would be rejected from the start".
     According to him, the real convergence means concrete things.
     "Many people, when they hear of real convergence, are either thinking strictly of the GDP per capita, which is not enough, it is just a small segment, or is a new jargon imposed by Brussels, a kind of Brusellese, which doesn't mean much. This real convergence means very concrete things. The real convergence involves the growth of the potential GDP which in turn involves structural reforms that would maximize the components that are part of the potential GDP, namely capital, workforce and total productivity of factors", the NBR official explained.
     Lazea stressed that only an economic growth based on these three components - capital, labor force and total productivity - is healthy and sustainable in time.
     "An economic growth based only on fiscal, salary and monetary stimuli is not sustainable and sooner or later can start reversing. It is fully understandable this ambition of burning through steps and getting the GDP per capita as close as possible to the rest of Europe, but if this skipping of stages is done in an unsustainable manner it will be a like a flash in the pan which lasts just a little and then goes out", he said.

 
 

 
Readers' comments    [ add a comment ] 
Trimite părerea ta.
Nume (maxim 50 caractere)
E-mail (optional)
Titlu (maxim 50 caractere)
Mesaj
 
REGULAMENTUL MESAJELOR
Acord
Prin trimiterea opiniei ne confirmați că ați citit regulamentul de mai sus și că vă asumați prevederile sale !
Aceeasi sectiune (English Section)
Calendarul BURSA 2018
Ediții precedente
Newsletter Facebook Twitter YouTube LinkedIn RSS
Jurnal Bursier
23.07.2018
BVB
     * Prime Transaction: "Indicii - în creștere, după ce Ministerul Finanțelor a retras proiectul privind plafonarea prețului gazelor"
     
     Ultima ședință de tranzacționare a Bursei de Valori...  click să citești tot articolul
23.07.2018
BURSELE DIN LUME
     Bursele din Europa s-au înscris pe un curs descendent vineri, după ce președintele american Donald Trump a amenințat China cu noi taxe vamale.  click să citești tot articolul
20.07.2018
BVB
     * Circa 64% din rulaj, dat de transferurile cu acțiunile Romgaz
     
     Toți indicii Bursei de Valori București (BVB) au înregistrat scăderi, în penultima ședință de tranzacționare a săptămânii,...  click să citești tot articolul
20.07.2018
BURSELE DIN LUME
     Bursele din Europa au scăzut ieri, din cauza evoluțiilor sectorului minier, afectat de declinul cotațiilor metalelor.
     Titlurile grupului minier global "Anglo American" Plc s-au depreciat...  click să citești tot articolul
19.07.2018
BVB
     Piața principală a Bursei de Valori București (BVB) a încheiat ședința de tranzacționare de la mijlocul săptămânii în teritoriul negativ, majoritatea cotațiilor terminând ziua în scădere, pe fondul...  click să citești tot articolul
19.07.2018
BURSELE DIN LUME
     Bursele din Europa au urmat un curs pozitiv, ieri, în baza rezultatelor financiare anunțate de companii.
     Titlurile producătorului suedez de echipamente de rețea "Ericsson" AB s-au...  click să citești tot articolul
Cotații Internaționale

Curs Valutar

Curs valabil din data de 20 iulie 2018
1 Dolar australian...
1 Leva bulgărească...
1 Dolar canadian....
1 Franc elvețian...
1 Coroană cehă...
1 Coroană daneză...
1 Liră egipteană...
1 Euro...
1 Liră sterlină...
100 Forinți maghiari...
100 Yeni japonezi...
1 Leu moldovenesc...
1 Coroană norvegiană...
1 Zlot polonez...
1 Rublă rusească...
1 Coroană suedeză...
1 Liră turcească...
1 Dolar S.U.A...
1 Rand sud-african...
1 Real brazilian...
1 Renminbi chinezesc...
1 Rupie indiană...
100 Woni sud-coreeni...
1 Peso mexican...
1 Dolar neo-zeelandez...
1 Dinar sărbesc...
1 Hryvna ucraineană...
1 Dirham emirate arabe...
1 Kuna croată...
1 Bahtul thailandez...
1 Gram aur...
1 DST...
AUD
BGN
CAD
CHF
CZK
DKK
EGP
EUR
GBP
HUF
JPY
MDL
NOK
PLN
RUB
SEK
TRY
USD
ZAR
BRL
CNY
INR
KRW
MXN
NZD
RSD
UAH
AED
HRK
THB
XAU
XDR
2.9463
2.3807
3.0169
4.0019
0.1800
0.6248
0.2232
4.6562
5.2019
1.4298
3.5534
0.2409
0.4865
1.0765
0.0630
0.4491
0.8319
3.9954
0.2967
1.0432
0.5894
0.0580
0.3522
0.2098
2.7025
0.0395
0.1511
1.0877
0.6297
0.1195
157.3290
5.5975
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
..Lei
click aici pentru cursurile pieței valutare - istoric
English Section
13.07.2018
Russia World Cup
     The final tournament of the World Football Cup will end with a gala representation, the duel between Croatia and France. France, the with the most expensive players in the tournament, has met the expectations, Croatia is the biggest surprise the of the competition.  click here to read the entire article
09.07.2018
FOOTBALL AND MONEY
     Cristiano Ronaldo (33 years old) had several hits over the last few days, even though in the final tournament of the World Championship he failed to exceed expectations, as Portugal was eliminated in the round of eight.  click here to read the entire article
05.07.2018
     The world is intensely preparing for a water crisis, the most important resource for human life. The signs, on a continental and global level, that there is a water problem are increasingly clear.  click here to read the entire article
02.07.2018
     The Bursa Construcțiilor magazine, published by the BURSA press group, has taken the first step in the third decade of existence and has awarded, in this year's Gala, no fewer than 20 awards of excellence, to some of the most important associations in the sector, as well as to companies that have stood out through their activity.  click here to read the entire article
27.06.2018
A VOTE FOR AN UNFORGETTABLE SUMMER
     In the plenum joint meeting of the Chamber of Deputies and the Senate, which will be held today starting at 14:00, will be debated and put up for vote the vote of no-confidence against the government submitted by 152 members of the opposition.
     The document which incriminates the failures of the Dăncilă government has been read in the Parliament on Monday, June 25th.  click here to read the entire article
25.06.2018
     Even without the court ruling rendered in first instance by the High Court of Cassation and Justice in the lawsuit of the fictitious hiring at the Child Protection Department of Teleorman the focus on getting all the institutional levers under the - informal, but all the more important - authority of Liviu Dragnea. But, after his conviction on June 21, this trend will speed up. But only through this kind of concentration of power can the president of the Chamber of Deputies hope to change not only the balance of power - which is already favorable to him, even though nothing is final in politics -, but the legislation based on which he has been sentenced, so that he gets exonerated of any legal responsibility. Or, when the powers of the state are concentrated in the hands of one man, democracy, even though it may be only a façade, moves aside to be replaced by autocracy. And in Romania, the temptation of autocracy, hidden under the veil of illiberalism, is more powerful than it has ever been, after the fall of communism. Could this be just an accident owed to the meteoric apparition of Liviu Dragnea?  click here to read the entire article
19.06.2018
     The Romanian Constitution:
     Art. 80 - The role of the president
     (1) The Romanian president represents the Romanian government and is the guarantor of national independence, unity and territorial integrity.
     (2) The Romanian president must watch for the compliance with the Constitution and the good functioning of the public authorities. For that purpose, the president serves as a mediating entity between the powers of the state, as well as between the state and society.  click here to read the entire article
12.06.2018
     The reunion scheduled today between Donald Trump and Kim Jong-un is taking place in Singapore due to the relative neutrality and the security this city-state provides. Singapore is one of the few countries that still hosts a North-Korean embassy, and many of the deals of the Kim regime were conducted here, according to the foreign press.  click here to read the entire article
05.06.2018
     "It is a good thing that the public doesn't understand the functioning of our banking and monetary system, because otherwise I think there would be a revolution in the streets by dawn".
     HENRY FORD, founder of the American automotive industry

     Fed up with subsidizing the commercial banks with their own money, the Swiss, mobilized through the "Sovereign Money" initiative, have proposed the organization of a Referendum which will be held on Sunday, June 10th 2018 - is a historical referendum, revolutionary for the banking industry, of international resonance -, by which the initiators want to amend the Constitution, which would impose to the commercial banks to grant loans only within the limits of the bank's money, forbidding them to issue scrip money and ensuring the monopoly of the Confederation (of the Swiss state) on issuance of money free of debt.  click here to read the entire article
23.05.2018
     The "pension apocalypse is coming"! The more or less qualified keep talking in the written press, TV and on the radio. The uncertainty is being preserved - deliberately by some, by the government members out of pure stupidity!  click here to read the entire article
16.05.2018
GABRIELA MIHAELA VOICILĂ, THE BUSINESS ENVIRONMENT MINISTER:
     Where there are many entrepreneurs there is creation, where there are many women entrepreneurs there is divine creation, says Gabriela Mihaela Voicilă, state secretary in the Ministry for the Business Environment, Trade and Entrepreneurship (MMACA). In her opinion, entrepreneurship means joy, a better situation, but less time for the family: "Taken together, entrepreneurship means achievements (...) Every one of us needs validation, for having built, having created something".  click here to read the entire article
14.05.2018
IN THE LAWSUITS AGAINST THE BANKS
     * Piperea: "In the Andriciuc case, the EU Court of Justice has not limited its argumentation to the CHF, but expanded it to cover any currency for which the debtors weren't hedged"
     The courts in the country have begun ruling in favor of borrowers and freezing the value of the European currency at the exchange rate valid on the date the loans were originated, in the lawsuits brought against the banks.  click here to read the entire article
09.05.2018
IN THE ROMANIAN BANANA REPUBLIC...
     The urge "Mircea, act like you're working!", back in the days of the so-called revolution of December 1989, was brought back recently by a new "director".
     We are talking of course, about the meeting between NBR governor Mugur Isărescu, and a government "delegation" led by chamber of deputies chairman Liviu Dragnea, together with PM Viorica Dăncilă.
     Sources from within the PSD, quoted by ziare.com, have claimed that, "in the meeting with the NBR governor, Liviu Dragnea seemed to be looking for a way out, and he seems confused, as he didn't expect his decisions to lead to such effects in the economy".  click here to read the entire article
08.05.2018
     Liviu Dragnea's insistence in moving the Romanian embassy from Tel Aviv, to Jerusalem, feeds an older, widespread confusion. Much older. Politically, Jerusalem has been divided from the first presence of the Judeans on the lands of the Palestinians, since back in the days of Abraham and Abimelec. "The indivisible Jerusalem" wanted by Benjamin Netanyahu is a spiritual creation.
     Definitely, pilgrims and locals claim that Jerusalem has a geography, meaning that the city would be compatible with the cardinal points and that is why Palestinians, Israelis and people overall, including those of the UN, EU and the US, speak about Eastern Jerusalem and Western Jerusalem, without anybody being surprised that that is happening at the center of the world, where the god of the Judeans began his creation, starting from the very rock from which later Archangel Gabriel raised Mohammed to visit Heaven, the same place of origin where one of the seven angels "and showed me the Holy City, Jerusalem, coming down out of heaven from God." (Apocalypse, 21: 10), where God is one of the same.  click here to read the entire article
03.05.2018
     Financial fair play is a concept that comes from the world of soccer. The notion is simple, don't spend more than you earn in a month, or in a year, regardless of what shareholder, mogul or investor enters the business.  click here to read the entire article
.