{"id":238669,"date":"2006-08-02T17:46:00","date_gmt":"2006-08-02T17:46:00","guid":{"rendered":"http:\/\/new.moldova.org\/2006\/08\/02\/experts-say-depreciation-of-leu-is-due-to-oscillations-of-eurodollar-exchange-rate-season-factors-and-internal-developments-15350-eng\/"},"modified":"2006-08-02T17:46:00","modified_gmt":"2006-08-02T17:46:00","slug":"experts-say-depreciation-of-leu-is-due-to-oscillations-of-eurodollar-exchange-rate-season-factors-and-internal-developments-15350-eng","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/experts-say-depreciation-of-leu-is-due-to-oscillations-of-eurodollar-exchange-rate-season-factors-and-internal-developments-15350-eng\/","title":{"rendered":"Experts say depreciation of Leu is due to oscillations of Euro\/Dollar exchange rate, season factors and internal developments"},"content":{"rendered":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

Experts say that the depreciation of leu on currency market last week and earlier this week, when one euro was worth more than 17 lei, is due to oscillations of the euro\/dollar exchange rate, season factors and internal macroeconomic developments. <\/p>\n

"The jump of the euro\/dollar pair on all international markets is the primary cause of this depreciation, given the dependence of domestic market on foreign market and vulnerability of economy toward external shocks," economist Iurie Gotisan stated to BASA. <\/p>\n

On the other hand, the expert noted that the depreciation is also due to season and long-term factors. The exchange rate is influenced by "the dramatic rise of trade deficit, which reached about 600 million dollars in January-May and could grow up to 1.6 billion dollars by the end of this year, according to forecasts." <\/p>\n

The expert considers that the leu will further face big pressures. They will come from the rise of internal prices, higher prices of energy imports, a weak promotion of exports, and negative influences of financial markets in the region. <\/p>\n

Gotisan underlined that the leu will have a big volatility in continuation and, therefore, it is hard to estimate the evolution of exchange rate of domestic currency till the end of this year. However, he forecasts an exchange rate of approximately 13.5-14 lei per dollar and 17.2-17.5 lei per euro for late December. <\/p>\n

At the same time, the economist does not rule out the scenario of a sudden depreciation of 3-5 percent of leu versus main currencies, which may take place in September-November 2006. <\/p>\n

Contacted by BASA, sources in the National Bank of Moldova (BNM) estimated that the latest depreciation of leu has a psychological nature and it is due to inflationist expectations of population linked to the higher natural gas price and an eventual rise of prices of other products and services. <\/p>\n

Under these conditions, one part of population has started purchasing foreign currency and, as a result, the demand on cash market has grown. At the same time, the sources noted that the situation on currency transfer market is pretty stable, while banks purchase and sell currency and serve economic agents. "We do not see any reason for a depreciation of national currency and BNM will intervene on currency market at any moment if needed be," a BNM representative assured. <\/p>\n

The exchange rate of Moldovan leu on cash market registered a negative trend both versus euro and versus U.S. dollar last week. Thus, if the maximum exchange rate of euro on currency market was 16.8600 lei for purchase and 17.2000 lei for sale on Monday, July 24, it reached 17.0000 lei for purchase and 17.4000 lei for sale on Friday, July 28. <\/p>\n

The central bank posted an official exchange rate of 13.3311 lei per dollar and 17.0124 lei per euro on August 2, while exchange offices were operating an exchange rate of over 17.1 lei per euro both for purchase and for sale. \/\/ BASA-Press<\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>Experts say depreciation of Leu is due to oscillations of Euro\/Dollar exchange rate, season factors and internal developments<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-238669","post","type-post","status-publish","format-standard","hentry","category-economy"],"content_social_share":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

Experts say that the depreciation of leu on currency market last week and earlier this week, when one euro was worth more than 17 lei, is due to oscillations of the euro\/dollar exchange rate, season factors and internal macroeconomic developments. <\/p>\n

"The jump of the euro\/dollar pair on all international markets is the primary cause of this depreciation, given the dependence of domestic market on foreign market and vulnerability of economy toward external shocks," economist Iurie Gotisan stated to BASA. <\/p>\n

On the other hand, the expert noted that the depreciation is also due to season and long-term factors. The exchange rate is influenced by "the dramatic rise of trade deficit, which reached about 600 million dollars in January-May and could grow up to 1.6 billion dollars by the end of this year, according to forecasts." <\/p>\n

The expert considers that the leu will further face big pressures. They will come from the rise of internal prices, higher prices of energy imports, a weak promotion of exports, and negative influences of financial markets in the region. <\/p>\n

Gotisan underlined that the leu will have a big volatility in continuation and, therefore, it is hard to estimate the evolution of exchange rate of domestic currency till the end of this year. However, he forecasts an exchange rate of approximately 13.5-14 lei per dollar and 17.2-17.5 lei per euro for late December. <\/p>\n

At the same time, the economist does not rule out the scenario of a sudden depreciation of 3-5 percent of leu versus main currencies, which may take place in September-November 2006. <\/p>\n

Contacted by BASA, sources in the National Bank of Moldova (BNM) estimated that the latest depreciation of leu has a psychological nature and it is due to inflationist expectations of population linked to the higher natural gas price and an eventual rise of prices of other products and services. <\/p>\n

Under these conditions, one part of population has started purchasing foreign currency and, as a result, the demand on cash market has grown. At the same time, the sources noted that the situation on currency transfer market is pretty stable, while banks purchase and sell currency and serve economic agents. "We do not see any reason for a depreciation of national currency and BNM will intervene on currency market at any moment if needed be," a BNM representative assured. <\/p>\n

The exchange rate of Moldovan leu on cash market registered a negative trend both versus euro and versus U.S. dollar last week. Thus, if the maximum exchange rate of euro on currency market was 16.8600 lei for purchase and 17.2000 lei for sale on Monday, July 24, it reached 17.0000 lei for purchase and 17.4000 lei for sale on Friday, July 28. <\/p>\n

The central bank posted an official exchange rate of 13.3311 lei per dollar and 17.0124 lei per euro on August 2, while exchange offices were operating an exchange rate of over 17.1 lei per euro both for purchase and for sale. \/\/ BASA-Press<\/p>\n

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