BUCHAREST: Romania's central bank indirectly sold euros in the foreign exchange market on Thursday to rein in a slide in the leu , dealers said, its first such move in 2014 amid a rout of emerging market currencies.
The midday intervention helped the local currency buck a fall across the board among regional peers, firming to about 4.51 per euro, 0.4 percent up on the day. "The leu's some 0.2-0.3 percent up after the moves.
They are selling euros indirectly via 'traditional vehicles' so the leu is bucking a slide in other regional currencies under steep downward pressures," said one dealer with a foreign bank in Bucharest.
Elsewhere on Thursday, investors largely shrugged off central bank efforts to shore up emerging markets through interest rate rises and currency intervention, selling stocks and bonds and further weakening currencies. Asked whether the Romanian central bank had intervened on Thursday, Adrian Vasilescu, adviser to Governor Mugur Isarescu told Reuters: "No comment." Another dealer said: "There's some exit from emerging area it was a good moment to step in indirectly.
The amount sold is pretty large."
A third one said: "Two commercial banks have been selling euros on behalf of the bank which had to discharge some hard currency in excess. From their perspective, timing was perfect."
The dealer explained $2 billion from new 10- and 30-year dollar bonds on the US market entered Romania last week.
Last year, Romania borrowed more than planned on foreign markets, both in euros and dollars, building a comfortable funding buffer and pre-financing some of its needs for 2014.
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