Leu Looking Lively

January 2005 | Market Strategy

The macro-economic picture remains supportive of the Romanian lei, which we expect to make significant gains this year. The Romanian Agency for Foreign Investments (ARIS) has upped its forecast for FDI flows in 2005 to EUR3.1bn from EUR2.6bn, which will help to finance the current account deficit, which rose to EUR3.27bn in January-November 2004. In addition, the carry on offer will also remain supportive of the unit, even after the central bank's current monetary easing cycle. It is possible that rates, currently 16.50%, will be eased by as much as 200bps over H105 to 14.50%. We remain confident that rapid

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