The Moldovan leu continues to appreciate against the currencies of the Moldova Currency Index-10 (IVM-10) for the third month in a row. Last week, this reached a new high of 95.75 points, which is by 4.25% higher than at the start of the year, economic expert of the Institute for Development and Social Initiatives “Viitorul” Veaceslav Ioniță says in an analysis that is quoted by IPN.
The expert noted that the Moldovan leu during August 3-9 appreciated by 0.75% against all the currencies of the main trading partners from the IVM-10. The leu last week appreciated by 3.33% against the Turkish lira, by 2.16% against the Russian ruble and by 1.84% against the Belarusian ruble.
Veaceslav Ioniță said that the Moldovan leu since the start of this year appreciated by 4.25% on average against the ten currencies of the IVM-10. It appreciated against eight currencies and depreciated against two currencies. The Moldovan lei appreciated the most against the Turkish lire (+18.80%), Russian ruble (+18.57%) and Ukrainian hrivna (+16.82%) and depreciated against the euro (-2.21%) and Romanian leu (-0.89%).
“In general, the Moldovan leu in 2020, in relation to the main currencies – US dollar and euro – copies the behavior of the Romanian lei,” said the expert. The U.S. dollar in July-August depreciated the most against the euro in the last three years (-5.00%), to 1.125 USD/EURO at the start of July and 1.182 in the first week of August, due primarily to the COVID-19 pandemic and the political struggle before the presidential elections.
According to Veaceslav Ioniță, a strong Moldovan leu is favorable for Moldova’s population as the imported products are by 4.25% on average cheaper only due to the exchange rate. Consequently, a strong leu allows to significantly decrease the inflation, which is beneficial to the population in conditions of economic crisis. However, the strong leu hits the national producers, especially the farmers and processors of agricultural products.
The economist noted the National Bank of Moldova has to oscillate between the population’s interests and the interests of business entities in conditions of powerful turbulences at international level, especially in the US dollar - Euro relations. The central bank should intervene slowly, at least in order to restore the Moldovan leu’s value of the beginning of this year and to maintain the middle position in the struggle between the Euro and US dollar.