EUR/RON: Political crisis drives volatility spike – Commerzbank
Bitcoin Ethereum News Commerzbank‘s Tatha Ghose highlights a sharp rise in Leu volatility after Romania’s government lost a no-confidence vote, leaving Prime Minister Ilie Bolojan as caretaker. The pro‑EU coalitions collapse clouds prospects for fiscal consolidation and EU funds. With a managed float and limited foreign participation, EUR/RON typically moves little, but high-profile crises like this can trigger pronounced swings. Managed float tested by government collapse “Romania‘s currency, the leu, experienced significant volatility this past week as the government faced a no-confidence vote, and lost this vote yesterday. Prime Minister Ilie Bolojan’s coalition government is now history. The vote came just ten months after Bolojan formed a four-party alliance to counter the rising far-right.” “The outgoing coalition was pro-EU, and was implementing fiscal austerity, heading towards a direction of unlocking EU funds – this endeavour clashed with vested political interests domestically and finally, failed. This puts a big question mark over the feasibility of fiscal consolidation, reforms or access to EU funds for Romania in the medium-term.” “Uncertainties will continue for now, hence RON volatility may take a while to calm down. Usually there are few incidents which rock this currency in this manner because it is a managed FX regime. At the same time,