Romanian Leu: Real appreciation alongside managed stability – ING

Concerns over the Leu’s overvaluation, Romania’s competitiveness and its current account in the coming years are growing as domestic wages and costs outpace those of trading partners. ING’s Valentin Tataru notes that the National Bank of Romania’s preference for containing EUR/RON movements has kept prices anchored while encouraging real appreciation. The Leu has depreciated only modestly, from around 5.00 to 5.34 per Euro.

Is Exchange Rate Stability Straining Competitiveness?

"The leu formally floats, but the NBR has historically limited large EUR/RON movements. For an import-intensive economy, that policy has clear benefits. A large depreciation would quickly raise the domestic cost of imported goods."

"The euro traded near RON 5.09 in March 2026, around RON 5.23 by May and roughly RON 5.34 by early October – a noticeable weakening of the leu after years of remarkable stability not far from the 5.00 level. Even so, the currency has moved far less than domestic costs."

"That leaves the NBR facing a genuine trade-off. Allow more nominal depreciation and import additional inflation in the short term, or limit depreciation and accept a gradual deterioration in cost competitiveness when domestic costs rise faster than those of trading partners."

"Romania has largely opted for a modified version of the latter approach, managing to combine exchange rate stability with rapid wage growth and persistent inflation for several years. The needed adjustment did not disappear, however, but it was largely redirected into real appreciation and a wider current-account deficit."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)