BUCHAREST – Romania’s national currency fell to a record low, with the euro trading at 5.1222 lei, according to the National Bank of Romania (BNR) – a 0.45% drop from the previous rate of 5.0991 lei.
The Romanian currency crossed the psychological threshold of 5 lei on Tuesday following the first round of presidential elections, which was won by a far-right candidate, and the resignation of the government led by Social Democrat Marcel Ciolacu.
In an effort to curb the currency’s decline, the National Bank has intervened in the market, leading to a notable rise in interest rates. The three-month ROBOR index surged to 7.25%, the highest level since January 2023.
Over the past few days, the central bank has spent at least 7 billion euros to stabilize the currency.
Despite attempts to soften his rhetoric and position himself as “Romania’s Meloni,” George Simion has so far failed to ease public or investor concerns.
Simion has announced plans to form a government composed of the far-right AUR and POT parties if he wins the second round of the presidential elections on May 18.
A poll published on Wednesday shows Simion with 38.9% support, compared to 31.3% for Nicușor Dan. Another 14.7% of respondents were undecided, while 8.9% declined to answer.
Excluding undecided and non-respondents, the results suggest Simion could secure 55.4% of the vote, with Dan at 44.6%, according to the Verified Institute.
The possibility of early elections has raised concerns in Romania’s business community, as the process could take several months, prolonging political instability.
Interim Minister for European Funds Marcel Boloș said on Thursday that there are no discussions about a potential agreement with the International Monetary Fund (IMF), adding that IMF involvement typically comes with “harsher reforms” than those outlined in Romania’s National Recovery and Resilience Plan.
He also expressed hope that this emotional reaction from markets and investors would subside soon.
Romania currently has the highest budget deficit in the European Union — 8.65% of GDP in 2024, up from 5.61% in 2023. The cost of servicing state debt remains very high due to the country’s weak credit ratings (Fitch: BBB-, S&P Global: BBB-, Moody’s: Baa3).