Black Thursday for the leu against the euro. The NBR explains the depreciation: “This is what happens in troubled times”
The national currency suffered a severe depreciation on Thursday, the official exchange rate displayed by the National Bank of Romania (BNR) decisively exceeding the psychological threshold of 5.1 lei for one euro. The tensions on the political scene, doubled by Romania's chronic economic vulnerabilities, pushed the European currency to a new historical high.
Euro. PHOTO: Archive
On Thursday, at 1:00 p.m., the BNR quoted the single European currency at 5.1417 lei, marking the highest level in history. The previous negative record for the national currency had been reached recently, on May 8, 2025, 10 days before the second round of the presidential elections, when one euro was quoted at 5.1222 lei.
And this time the depreciation of the leu occurs in an extremely difficult political context, as the government led by Ilie Bolojan could fall following the censure motion submitted by PSD and AUR.
The BNR promises to calm the situation
Contacted by “Adevărul”, Dan Suciu, the spokesperson of the NBR, explained that the reaction of the foreign exchange market is a direct response to the climate of uncertainty, emphasizing, however, that there are premises for the situation to moderate.
“This is what happens when we have periods of uncertainty and political turmoil. These consequences have been seen in the market. After the latest data we have now, we can say that the situation will calm down”said Dan Suciu for “Adevărul”.
Advisor to Prime Minister Bolojan: “The pressure on the course was inevitable to appear”
Beyond the emotional reaction of the markets, Romania's weak economic fundamentals play a crucial role in this depreciation. Economist Ionuț Dumitru, chief economist of Raiffeisen Bank and honorary adviser to the prime minister, explained to “Adevărul” that the political instability is superimposed on an already precarious fiscal and budgetary situation.
“I think the causes are clear. The political instability, all these discussions about the motion of censure and the possibility of the fall of the Government, in a context where Romania needs a fiscal adjustment and still has a difficult situation at the budgetary level. The fact that, on top of the multiple problems or challenges we had, there is an even more important one, related to the political situation, which has implications for the measures the Government must take in the next period regarding the absorption of European funds, in PNRR in particular, which is coming to an end, and regarding the fiscal consolidation in the coming years. All these things lead to a sense of unease among investors, and price pressure was inevitable at some point.” explained Ionuț Dumitru.
The effects of the depreciation of the leu will not remain only on the screens of brokers, but will quickly transfer to the real economy and the pockets of the population. According to Ionuț Dumitru, Romanians will feel this crisis on two main coordinates.
“Of course, an exchange rate depreciation has implications on various levels. It has direct effects on inflation, and relatively quickly. It has implications for those who have installments in euros and incomes in lei. So there are important implications”emphasized the economist.
For the state, the impact on budget revenues is not necessarily directly significant, but the general effect on the economy, manifested primarily through inflationary pressures, is a major problem.
“For the Government, in terms of budget revenues, the impact is not necessarily that significant; it is more important for the economy in general, primarily through inflation. But the fact that we have some weak economic fundamentals is clear. Against the background of these weak economic fundamentals, budget deficits, current account deficits, those twin deficits that we have been talking about for years, there are question marks about the ability and willingness of the Government or the public authorities to correct this situation, in a political context like the one we're going through now. It's clear that investors are becoming more cautious and nervousness in the financial markets is growing.” explained Ionuț Dumitru.
Romanians move their savings to euros
The alarm signal regarding the vulnerability of the national currency had been sounded since Wednesday, before this new record, by Lucian Croitoru, advisor on monetary policy issues to the governor of the BNR.
“Political tensions are transmitted in the concern of the markets. The stronger the tensions, and the market perceives that the economic policies will be affected by the political crisis that could lead to an increase in the deficit, inflation, the stronger the leu depreciates. Part of the savings is redirected to the euro if the market perceives changes generated by the political tensions. If this crisis ends well, then the markets will recover and the exchange rate will recover with them”. stated Lucian Croitoru.
