Romania Allows Currency to Weaken as Politics Fuel Selloff

A Romanian political crisis is once again testing the country’s managed float currency regime, with the central bank allowing the leu to slip to record lows this week.

The leu extended its slide on Wednesday, depreciating about 1% against the euro in the past two days. Lawmakers on Tuesday voted to bring down the administration of Prime Minister Ilie Bolojan following coalition clashes over painful austerity measures. A year ago, the central bank also let the leu drop during turmoil surrounding a presidential election.