NBM governor says situation on currency market is favorable both for businesses and populace

The situation on the currency market is favorable both for the populace and businesses, stated National Bank (NBM) Governor Dorin Dragutanu, commenting on the recent developments of the national currency's rate, Info Prim Neo reports. According to the governor, the depreciation of the Moldovan leu against the Euro is determined by developments on the global markets. “In the last four months, the US dollar has significantly depreciated against the Euro, and considering that officially the Moldovan leu's rate is established against the dollar through a simple cross-rate procedure, the Moldovan leu dropped against the Euro as well. There are no other causes”, assured Dragutanu, adding that it's difficult to forecast how the Euro-Dollar pair would develop in the future. At the same time, Dragutanu said that the remittances from Moldovans working abroad are bigger in 2011 than in 2010 and the populace possess more money in foreign currencies now. “We should remark that individual savings are mostly kept in Euro and lately the sales of euros have significantly risen, because with the appreciation of the Euro people get a better price. On the other hand, this offer from the people helps to satisfy the businesses' demand for foreign currency, which in turn helps them buy more raw materials, products and other imported commodities. This correlation between demand and offer has led to a slight appreciation of the leu against the dollar. So the people are happy to get a better price when selling euros, because the leu has depreciated against the Euro, and the businesses are also comfortable with a slightly weaker dollar. Thus, the current situation on the currency market is favorable for everybody”, said Dragutanu. Commenting on the international developments, Alex Oprunenco, analyst with Expert-Grup, said: “Investors show an increased interest in the Euro as European banks are doing everything to offer more attractive interest rates to these investors. The Euro, on the other hand, also carries some risks, related to the sovereign debts of some EU countries. Greece and Portugal are in critical situations, there are also political risks like the growing political influence of some populist parties in France, Finland and other countries, which could undermine the Euro's stability”. Concerning the local currency market, Oprunenco said: “While people may get better prices when selling euros, we shouldn't forget that most Moldova's imports are from the EU and these are becoming more expensive. So this is cutting both ways”.