Foreign investors grasp the Romanian market guided by flair, central bank says

Foreign players on the Romanian market often use their knack when placing investments in the lack of some overall researches, vice president of the country's central bank (BNR), Cristian Popa said.

Among the vulnerabilities of the Romanian economy, Popa reminded the currency exchange rate. The leu has recently recovered after a difficult evolution in the first two months this year when it fell to 3.7 versus the euro. Last year the currency saw highs of 3.3, 3.2 versus the euro on positive economic environment.

"The appetite for risk turns Romania into a transaction substitute of other economies where the exchange rate is impossible to trade, such as the Baltic countries and Bulgaria, therefore investors take advantage of Romania's more liquid position," Popa said.

Romania has a managed float which allows foreign players to speculate the exchange rate while the Baltic countries and Bulgaria have adopted a pegged currency against the euro, Popa explained.

The leu was among the currencies in the region which dropped the most at the beginning of turmoil on international markets, in August 2007.

NewsIn