Exchange rate in Romania remains 'balanced within acceptable margins', according to the country's central bank.
Romania's currency, the leu (RON), has witnessed a recent depreciation against the euro, after significant strengthening last month, following the presidential election victory of pro-EU candidate Nicusor Dan.
In a press conference hosted by the National Bank of Romania (BNR) on May 20, the BNR governor, Mugur Isașcu, stated that the RON remains "within a range of balance." Despite the depreciation, BNR announced a 1% drop in the leu's value against the euro that day.
The RON had crossed the threshold of RON 5 to EUR in the weeks leading up to the elections, depreciating approximately 2% as of now (RON 5.085 to EUR). Compared to the months preceding the elections, this exchange rate represents a notable weakening of the Romanian currency.
During the conference, Isașcu clarified that BNR would defend the local currency from crossing a certain threshold, as it still operates under a managed floating exchange regime. Over the past few years, the Central Bank has also prevented excessive strengthening by sterilizing foreign exchange inflows. Despite these efforts, the leu strengthened by around 5% in real effective terms during the year 2024.
If the excess currency had not been removed from the market, Isașcu explained, the exchange rate would have dropped to RON 4.4 - 4.5/EUR, potentially leading to further depreciation. Isașcu used the evolution of the Hungarian forint and the Polish złoty as an illustration, noting that he would not accept such a fluctuation following the steep appreciation and subsequent deep depreciation experienced in 2007-2008.
As for the question of whether the RON is still overvalued, the assessment requires considering broader economic indicators beyond exchange rate trends, such as current account deficits and inflation differentials with the eurozone. If Romania continues to exhibit these imbalances, the leu may still be overvalued relative to the euro, even after the recent depreciation.
In 2020, there were concerns of RON overvaluation due to slow depreciation and external imbalances. However, the most recent data indicates that the average RON/EUR rate for 2025 is around 0.2004 EUR per RON, suggesting a loss in value for the leu. As of May 2025, 1 EUR equals approximately 5.05–5.07 RON, according to current interbank and European Central Bank reference rates.
The governor of the National Bank of Romania, Mugur Isașcu, stated that the bank would defend the local currency, the leu, from crossing a certain threshold, suggesting that they will intervene in the industry of finance to maintain the exchange rate. Despite the recent depreciation of the RON, the bank announced a 1% drop in the leu's value against the euro on May 20, indicating an attempt to prevent further depreciation in the finance sector.
