Snaps
7 November 2019

Briefing Romania

The National Bank of Romania left its key rate unchanged at 2.50%

Romania_in_Europe.jpg

 - Source: Refinitiv Datastream
Source: Refinitiv Datastream

EUR/RON

The above-average turnover in EUR/RON brought more upside pressure, with the pair printing the highest fixing since May this year. Yesterday, central bank Governor Mugur Isarecu downplayed the recent leu weakness, labelling the fluctuations as “minor”. Nevertheless, we believe that the general trend remains to the upside and it’s only a matter of time before a correction higher will occur (more on this here and here).

Government bonds

Romanian government bonds faced some selling interest yesterday, although with a lag compared to regional markets, with the curve adjusting three to four basis points higher at the longer end. The EUR200 million Dec-2023 auction enjoyed good demand of EUR773 million, with the Ministry of Finance upsizing the allocation to EUR338 million at a 0.24% average yield. Today however the story will likely be much different as a RON200 million Oct-2034 auction is planned. Last month, this particular ISIN witnessed quite split demand (see here) and we don’t expect too much enthusiasm from the market for this tenor.

Money market

The money market remains calm these days as the liquidity surplus seems just enough to keep rates stable around 2.50%.

 - Source: Refinitiv Datastream, ING estimates
Source: Refinitiv Datastream, ING estimates