Expert says Moldovan leu registers in July strongest appreciation in recent 11 months
10:42 | 15.07.2019 Category: Economic
Chisinau, 15 July /MOLDPRES/ – The Moldavian leu (MDL) has appreciated in the first fortnight of July by 2.5 per cent against the euro/dollar basket. It is the highest appreciation in recent 11 years after August 2008, when MDL had strengthened by 4.3 per cent in just two weeks, specifies economist, Veaceslav Ionita, in an analysis placed on his blog.
The value of MDL has appreciated against USD by 1.8 per cent or MDL 0.32, from MDL 18.1683 for $1 to MDL 17.8448 for $1, and against EUR the appreciation has been 2.9 percent or MDL 0.59, from MDL 20.6582 for €1 to MDL 20.0658 for €1, says expert.
"This appreciation comes after a strong depreciation of leu in IInd quarter of 2019. The causes of this "currency carousel" must be sought in IInd quarter events when we witnessed an atypical demand for currency on market, which has influenced the depreciation of MDL. Only in May 2019, the currency deficit was about $40 ml," writes economist Ionita.
According to him, economically, it is very difficult to explain this demand for currency, "but here comes the statement of President, Igor Dodon, which has informed the public opinion that Moldova has been earmarked MDL 01 bln throughout "hard to explain" transactions. Most likely, this "currency demand" was one of the factors of MDL depreciation in IInd quarter of 2019. On it, all forecasts and analyses of forex market experts need to be adapted to "specific circumstances" of Moldova which can overcome any forecasts."
The currency appreciation strongly affects exporters, especially farmers, which in summer months export massively agricultural products.
The economist has mentioned that the leu will continue to oscillate, but the role of the BNM is to prevent its sudden fluctuations. For the traditional summer months, the Moldovan leu tends to appreciate, and in autumn – winter it is a slight depreciation trend.
The latest BNM data on May demand and supply on foreign exchange market show a decrease in the coverage of net foreign – exchange demand by economic agents by the net foreign currency supply from individuals to 84.6 per cent, previous months exceeded 120 per cent. The data for June will be published next week.
In mid – June, BNM denied some info that large amounts of money had been withdrawn from Moldova and assured that "there have been taken additional measures under the international transfer monitoring regime."
