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Exchange Rate Evolution In Romania - Effects On The Financial-Monetary Market

Author

Listed:
  • MILEA, Camelia

    (“Victor Slavescu” Center for Financial and Monetary Research, Romanian Academy)

Abstract

In this article I analyze if the evolution of the RON/EUR and RON/USD exchange rates, in the period 1990-2015, has been characterized by volatility or by stability. I also study the relationship between the evolution of the exchange rate of the national currency and some of the Romanian financial-monetary market indicators. The results obtained show that both the RON/EUR and RON/USD exchange rates were stable after 2004, and, therefore, they didn’t generate tensions on the financial-monetary market in Romania. The evolution of the national and international economic and political factors (the crisis, the speculations, the distrust of investors, the policy interest rate and the exchange rate policy) has influenced the behaviour of the Romanian national currency. The analysis shows that mostly the monetary market tensions have influenced the evolution of the exchange rate of the national currency rather than vice versa, because the volatility of the exchange rate has appeared after 2004, only on the short-term, not as a general trend.

Suggested Citation

  • MILEA, Camelia, 2016. "Exchange Rate Evolution In Romania - Effects On The Financial-Monetary Market," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 20(4), pages 17-36.
    • Handle: RePEc:vls:finstu:v:20:y:2016:i:4:p:17-36
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    References listed on IDEAS

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    1. Yasin Akcelik & Orcan Cortuk & Ibrahim Turhan, 2014. "Mitigating Turkey’s Trilemma Tradeoffs," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 50(6), pages 102-118, November.
    2. Joshua Aizenman & Rajeswari Sengupta, 2013. "Financial Trilemma in China and a Comparative Analysis with India," Pacific Economic Review, Wiley Blackwell, vol. 18(2), pages 123-146, May.
    3. Devereux, Michael B. & Yetman, James, 2014. "Globalisation, pass-through and the optimal policy response to exchange rates," Journal of International Money and Finance, Elsevier, vol. 49(PA), pages 104-128.
    4. Milea Camelia, 2014. "The Financial Integration in Romania and in the New Member States of the European Union," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 84-88, May.
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    Cited by:

    1. Mariana Hatmanu & Cristina Cautisanu & Mihaela Ifrim, 2020. "The Impact of Interest Rate, Exchange Rate and European Business Climate on Economic Growth in Romania: An ARDL Approach with Structural Breaks," Sustainability, MDPI, vol. 12(7), pages 1-23, April.

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    More about this item

    Keywords

    national currency; interest rate policy; stability; evolution; influence; fluctuation;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other

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