Romania leu rises after Reuters report

Romania`s leu came off its lows and then rose against the euro in subsequent days after central banker Napoleon Pop told Reuters on May 25 that interest rates could rise if inflation persisted — the first hawkish statement by a Romanian rate-setter since the central bank cut borrowing costs to a record low 6.25 percent in May 2010. Pop’s comments came after the bank raised its year-end inflation forecast significantly above its 2-4 percent target, putting on ice market expectations for more rate cuts. Traders and private bank analysts said the interview by Radu Marinas and Michael Winfrey was of particular significance because Pop rarely speaks publicly, so markets have little insight into his thinking.