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Analysis: Exchange rate to fluctuate 4.15 - 4.21 lei 1 euro and inflation to stand at 4.5-5%

The leueuro exchange rate will most likely fluctuate between 4.15 and 4.21 lei for 1 euro, with 4.10 lei 1 euro being the most optimistic level that could be reached this year, Cristian Cochintu, financial analyst at Financiar Admiral Markets Romania, told Agerpres. 'The leu will be affected by unfavorable monetary outlook, the reduction in interest rate difference between the Eurozone or the United States and Romania. On the other hand, there will be the European officials' desire to have a weak currency. There will not be spectacular fluctuations as long as it remains below the key level of 4.3, with exceeding this level being a disaster for the leu,' Cochintu said.

According to him, inflation rate could stand at 4.5 - 5% at end-2010, because the inflation target is usually missed. As to the monetary policy interest rate, he said it would certainly fall below 6%, somewhere around 5.5- 5.75%, a level necessary for the resumption of lending, providing inflation slows down.

'Romania's economy was below the EU average (the editor's note - in 2010), having been outpaced by Hungary and Poland. Officials reacted later and uninspired to the global crisis, and that is why the effects are felt so strongly. It was difficult to have a positive year, but we probably could have had a neutral one,' said Cochintu.

As to this year, he explained, exiting the negative area is the most optimistic scenario, 'but we cannot speak yet of sustainable growth.' 'Austerity measures will continue to affect consumption and investments, and it may be a transition year for a positive 2012,' concluded the analyst of Admiral Markets Romania.