10 Lei (Nicolae Cajal) – Romania

In 2019, Romania's currency situation was characterized by a period of relative stability for the Romanian Leu (RON) against the Euro, but within a context of persistent macroeconomic imbalances. The RON traded in a narrow band, around 4.7 to 4.8 RON per EUR for much of the year, supported by robust economic growth and attractive interest rates that drew foreign investment into government bonds. However, this stability was somewhat artificial, heavily managed by the National Bank of Romania (NBR), which intervened in the foreign exchange market to smooth volatility and prevent excessive depreciation.

Beneath this calm surface, significant pressures were building. The country was grappling with twin deficits—a substantial current account deficit, exceeding 4% of GDP, and a widening budget deficit, driven by increased public spending and tax cuts. This made the economy reliant on short-term capital inflows, leaving the currency vulnerable to shifts in global investor sentiment. Furthermore, political instability and concerns over fiscal discipline, including controversial emergency ordinances affecting the banking sector, periodically eroded investor confidence and put downward pressure on the Leu.

Consequently, the key theme of 2019 was the central bank's challenging balancing act. The NBR cautiously raised its benchmark interest rate to 2.50% by year-end to combat above-target inflation and support the currency, but it had to do so without stifling economic growth. The overall situation highlighted Romania's underlying vulnerabilities: strong consumption-driven GDP growth was being sustained at the cost of growing external and internal imbalances, with the stable RON masking the need for structural reforms to ensure long-term stability.