Romania’s leu strengthened for a second day as a bailout agreement for Cyprus and expectations of improved U.S. economic data spurred investor appetite for riskier, emerging-market assets.
Yesterday’s agreement by finance ministers from the 17- nation euro area on the outlines of an aid package for Cyprus boosted the leu for the first time in three days. European stocks rose for the first day in four before reports today that may show durable-goods orders increased in the U.S. while new- house sales held close to a four-year high last month.
“We expect leu to continue to gradually head for stronger levels, below 4.4 per euro, as Cyprus crisis effect tapers off,” analysts at BRD-Groupe Societe Generale SA, including Bucharest-based Roxana Hulea wrote in a note today.
The leu appreciated 0.1 percent to 4.4127 per euro by 11:50 a.m. in Bucharest, the highest level on a closing basis since March 18, according to data compiled by Bloomberg. The currency has advanced 0.8 percent this year, the third-best performance among peers in eastern Europe and Africa tracked by Bloomberg.
The Banca Nationala a Romaniei provided funding in line with demands from commercial lenders at its weekly repurchase operations for a fourth week yesterday after limiting liquidity for five months to help boost the currency. The central bank lent 3.5 billion lei ($1 billion), more than the 247 million lei provided a week earlier.
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