Romanian Leu, Stocks Unfazed After Street Protests, May Falter If Things Escalate
Violent protests that left 59 Romanians injured over the weekend had no effect on the local financial markets so far, but an escalation may lead to the government’s collapse and implicitly to a weaker leu and falling stock prices, analysts said.
“The leu doesn’t seem affected by the recent events, despite wide media coverage in international markets, as the investors have probably become less sensitive to such events over the past few years. The leu has the reputation of a strangely stable currency,” said Vlad Muscalu, analyst at ING Bank Romania.
Should the protests continue, the center-right government might be forced to resign, endangering the country’s financial agreements with its international partners and putting pressure on the leu, Muscalu added.
Thousands of Romanians took to the streets over the past four days to protest against austerity measures, demanding the resignation of President Traian Basescu and of the government members.
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