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Weak leu not a silver bullet for Romania’s CA deficit

Romania’s current account deficit is likely to rise to almost 9% of GDP this year. While a weaker currency would help to reduce this shortfall, structural reforms are needed to boost competitiveness in the long term. Until then, Romania’s deteriorating external position leaves the country vulnerable to souring risk appetite, which could put downward pressure on the leu and prompt a further bond market sell-off.

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