Last week, as the dollar fell sharply in value, the euro briefly exceeded $1.20 per unit for the first time in four years. This development caused concern at the European Central Bank (ECB), but also pleased euro-focused investors and attracted needed capital.
Tensions are rising. A rising euro could negatively impact European exporters and make it harder to meet the ECB’s 2% inflation target. In response, the ECB may consider lowering interest rates or threaten to do so, European media wrote.
As for the Moldovan economy, the rise of the euro is a two-edged sword for it. It is beneficial for those who are maximally oriented to the European market and use local raw materials. For those who are highly dependent on imported components, the effect will be neutral or moderately negative due to the growth of production costs, experts predict.
On the one hand, for companies selling goods to the EU (which is more than 60% of all Moldovan exports), the euro exchange rate growth means receiving more lei for the same volume of sold products. This increases their nominal profit and makes it easier to pay salaries and taxes inside the country.
On the other hand, if an exporter uses imported raw materials, equipment or energy resources purchased for euros, their value in lei will increase. This may “eat up” the benefit of high revenues.
In the context of the transition of the National Bank of Moldova (NBM) to the euro as the base currency from January 2025, the strengthening of the European currency also has twofold consequences, related both to the reduction of currency risks and to the import of inflation.
With the leu now pegged to the euro, the volatility of the EUR/MDL pair has been reduced. Exporters now spend less on currency conversion – according to NBM estimates, the countrywide savings can reach up to EUR 10 million per year in operating costs. Also, the access since last year to the single European payment system SEPA makes cross-border transfers for businesses practically free and instantaneous.
Nevertheless, the rising cost of energy for an economy completely dependent on energy imports threatens to further reduce competitiveness due to the associated costs. And imported inflation will reduce the already low solvency of the population, which will once again jeopardize economic growth based on consumption.
The statistical context does not offer much hope. In the first 11 months of 2025, exports grew by 4.4% to $3.43 billion, thanks to a successful agricultural year. Meanwhile, the EU’s position as a major partner continues to strengthen, despite a number of circumstances preventing access to European markets.
The Euro exchange rate at the end of 2025 – beginning of 2026 fluctuated around 19.7-19.8 lei per Euro.
