The current depreciation of the leu against the main currencies is a continuation of last year’s tendencies. As the inflation this year is expected to be very low, which means a slight rise in prices, this depreciation is somehow welcome. If particular deprecation of the leu persists, this will not significantly affect the level of prices.

Contacted by IPN for details, Alexandru Fala, economist of “Expert-Grup” Independent Think Tank, explained that one of the main risks of the depreciation of the leu is the stimulation of the rise in the prices of goods. Respectively, the imported goods become more expensive, being sold at higher prices domestically too. When we expect a very slow acceleration of inflation, this deprecation does not have a significant impact and does not create serious risks and is even favorable.

Alexandru Fala said the depreciation of the Moldovan leu is not determined by internal factors. In the Republic of Moldova, the official exchange rate is actually the exchange rate of the leu against the dollar, while the exchange rate against the other currencies is determined depending on this official rate and the international quotations against the dollar. To determine the official exchange rate of the leu against the euro, the exchange rate of the leu against the dollar and the exchange rate of the dollar against the euro or vice versa from international markets are first taken. The exchange rate of the leu against the euro and also against the other currencies is determined based on these two variables.

The current depreciation of the leu against currencies advantages the citizens who receive money from abroad as they take more money when they convert the received money.

The affected categories are those who must make payments in euro. For example, there are persons who make savings in lei, but want to purchase a car or an apartment in euro. In this case, there is a risk that the given persons will be unable to purchase the wanted sum in euro with the gathered money and they will have to save more or to borrow. 

Also, the depreciation affects the importers that should pay more for the goods purchased from outside.

Alexandru Fala said that in general, particular depreciation for Moldova would be welcome. As our prices rise faster than in other countries and the leu often appreciates against other currencies, this makes the Moldovan goods be more expensive than in other states. This is not really beneficial to the national producers. The real exchange rate is an indicator of the competiveness of our products and this deprecation makes so that the Moldovan products are cheaper outside the country.