Bet on the leu in February as well

• For the coming period, businesspeople and financial expect a moderate appreciation of the Romanian currency

• The leu going below the psychological threshold of 4 lei/Euro could create macroeconomic imbalances

The Romanian currency reached a new nine month high against the Euro, with the Central Bank posting a reference exchange rate of 4.1215 lei/euro.

Analysts consider the leu will continue to appreciate against the Euro in the coming period, expecting the exchange rate to be in the vicinity of 4 - 4.1 lei/Euro.

"The leu will continue to appreciate in February as well, but this appreciation should be kept under control, because if the leu were to reach 3.8 - 3.9 lei/euro, it could cause some problems for the economy", Nicolae Chidesciuc, chief-economist with ING said.

The end of the political crisis, the decision of the NBR to cut the policy rate from 8% to 7.5% and the trend for regional currencies seem to be the main factors behind the strengthening of the leu. Opinions are split, some businesspeople think the appreciation of the leu is simply the result of currency speculations.

"Still the economy could withstand an exchange rate of 4-4.1 lei/Euro, but the impact of a stronger exchange rate on the business environment, especially importers, needs to be considered", Chidesciuc says.

• Businesspeople: "The exchange rate will continue to fluctuate between 4.1-4.3 lei/Euro, we have guarantees from the NBR in this respect"

An increasingly stronger leu is beginning to be a cause for concern among businesspeople, who would like the exchange rate to remain in the 4.1-4.3 lei/euro in the coming period.

Businesspeople think that an exchange rate fluctuating in the aforementioned range would be the best for exporters and importers alike.

"We received guarantees from the Romanian National Bank, and for the coming period, an exchange rate with a deviation of 5% from the 4.1 - 4.3 lei/Euro would be very beneficial to us", said Mihai Ionescu, the secretary general of the National Association of Exporters and Importers of Romania (ANEIR).

The ANEIR official said that the current value of the exchange rate reflects reality, as the currency market is currently dominated by commercial players and not by speculators.

However, Mihai Ionescu warned that if the leu were to continue its strong appreciation against the Euro, this would cause exports to be affected, even as they"ve been on the rise since December.

The secretary general of the ANEIR said: "In December 2009 we had a first when it comes to exports. It was the first month when exports exceeded imports, both compared to December 2008 (+26.7%) and to December 2007 (8.2%)".

As for 2010, Mihai Ionescu warns that, for now, "there are no guarantees" that Romania could meet its goal of increasing exports by 3.3%. "We do not know if we are going to successfully meet this goal, of keeping the upward trend for exports, as there are companies that are still losing contracts due to the crisis on the foreign markets", the ANEIR official said.