The euro exchange rate, which is “stuck” at or around 5 lei, affects you in various ways. Among the most important: your loan rates will increase (if you borrow in euros), your food will become more expensive (three-quarters of imports are paid for in euros) and your vacation will be more expensive if you plan to take it in Europe

Bank rates will rise. But they would still grow on you

Interest rates on loans in euros will increase with the appreciation of the European currency against the lei. But this is not the only bad news. They will still rise as the European Central Bank raises its key interest rate, making the single currency even more expensive. During the week, the euro rate rose from 4.92 to 4.97 lei.

The ECB has raised interest rates by a total of 3.75 percentage points since last July and has promised further hikes, but at a more measured pace of 0.25 percentage point increases, after excessive steps in the first part of its campaign to tighten monetary policy.

Many of the consumer goods we buy are imported. And they will be expensive

If you buy a shirt or a TV, you are stimulating manufacturing jobs in China or, at best, in a European country.

This is true across the economy, but a useful example is the apparel industry (where sales doubled in January, according to statistics). Our textile industry has one of the lowest wages and is struggling to survive. And where did the money go? Answer: In factories in China and other parts of the world that produce clothes for the Romanian market.

And we are talking not only about clothes, but also about food, furniture, pharmaceutical products, etc. In short, we consume from imports. And you have to pay for imports. Therefore, any appreciation of the euro will be reflected in the price of products on the shelf.

Vacationing in Europe? Check your card to see how much you’ll pay

A strong euro means you’ll need more lei for a coffee in Vienna or Paris than you did a week ago

According to a study by a travel operator, almost 80% of Romanians will go to European countries this summer vacation. In addition, 55.9% want more city breaks this summer, mini-vacations or vacations that will be more expensive. Of course, if you decide to spend your vacation in Romania, its price will be slightly affected by the euro.

Photo source: © Pavlo Ilyukhin | Dreamstime.com