EFTA01379415.pdf

22 December 2017 EM Currency Handbook 2018: Still Fuel in the Tank Romania The leu was introduced in 1867. Romania left the gold FUR/RON and USD/RON exchange rates standard in 1914 and the leu's value fell. A revaluation 50 SO took place on August 15, 1947. replacing the old leu at 41 4S a rate of 20,000 old lei = 1 new leu. At the time of its 40 40 introduction, 150 new lei equalled 1 USD. On January IS 28, 1952. another new leu was introduced. Unlike the 30 30 previous revaluation, different rates were employed for 15 25 different kinds of exchange (cash, bank deposits, debts 20 20 etc.) and different amounts. These rates ranged from 20 15 15 to 400 "old lei" for 1 "new" leu. From 1994 to 1997 the 10 1.0 leu was freely-floating before becoming a managed 0.5 Of float against USD and baskets of EUR and USD. At the 00 . . . . . 00 end of October 2004, the National Bank of Romania 2004 2005 2006 2007 20012 2009 2010 2011 2012 2023 2014 2015 2016 2017 (NBR) abandoned the basket and moved to a more tiSDIADN.thi flexible exchange rate. On 1st July 2005 the leu was AVM Deuesol brit abornbery awn& VW w ROW0000up to A4.05 redenominated, with the old ROL being converted to RON at a rate of 1 RON = 10,000 ROL. On 1st September 2006, the NBR eliminated the remaining capital controls and completed the liberalisation of the USD/RON and RON 3M imp€teci yield capital account. 44 43 0 Romania joined the EU in 2007 and therefore has a 41 25 - commitment to join the Euro at an unspecified future 41 date. In order to enter the Eurozone, all five Maastricht 20 40 criteria must be met including the commitment to enter 15 ERM-II and maintain EUR/RON +/-15% around a - 3.1 10 selected "parity" rate for at least 2 years. 3.7 03 - 36 The NBR is run by the Board of Directors, which 00 35 consists of nine members and is led by a Governor. The 0, 400 it.‘ 4, it /VsA 1OS A $ 6%A #1 A NBR moved to direct inflation targeting in 2005. The O CS 1.150/110N3in6y0640 IM •—••••1150/RON ,ths inflation target has been 2.5% with a +/- 1% variation band since 2013. Segto• Oteache EOM — — — — — — — — — — — — The exchange rate regime of the leu currently in place USD/RON implied and historical volatility is that of a managed float, in line with using inflation 120 targets as a nominal anchor for monetary policy. 100 The leu is both fully deliverable and convertible. Spot is liquid in both USD/RON and EUR/RON but EUR/RON is 6.0 viewed as the economically correct way to take a view 4.0 on the leu. 2.0 0.0 -20 2010 2011 2012 2013 2014 2015 2016 2017 Del••notial .irrol 3m vol•••••••••11623mvol Sotto* Pomo*Dot OitontrfroRae LP Page 76 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0076879 CONFIDENTIAL SDNY_GM_00223063 EFTA01379415