Briefing Romania

Low volatility and well below average turnover seem to be the main features of EUR/RON trading these days. For now, the pair looks stable in the 4.7550 - 4.7600 range. Medium-term, the only way for the EUR/RON seems to be upwards.

A very good Aug-2022 auction marked yesterday’s otherwise dull trading session in Romanian government bonds as London was closed. The Ministry of Finance sold RON872 million versus the RON500 million planned. Total bid-to-cover came out at 2.5x and yield-wise the auction met our expectations, at 3.94/3.95% average and maximum yields. Clustered demand, upsized allocation and mid-market yields, it was all in there for a successful auction.

The National Bank of Romania (NBR) stepped in yesterday to organise a one week deposit taking auction, draining RON2.67 billion from 10 participants. This should keep cash rates anchored around the 2.50% key rate and signals the National Bank of Romania's commitment to its already announced “strict” liquidity control.