Briefing Romania

It was back to normal for the Romanian leu yesterday as the currency floated in a narrow 30 pips band against the euro, closing the day around the opening level of 4.7190. As yesterday’s trade balance data has shown, fundamental pressures continue to point towards leu depreciation. The 2019 January-April trade gap widened by 34% YoY, exceeding EUR5bn.

An overall calm secondary market was outshone by a buoyant primary market yesterday. The Ministry of Finance allocated RON990m versus the RON600m targeted for the April-2024 auction, at an average of 4.29% and maximum of 4.30%. Total demand stood at RON1.68bn and was quite well clustered. This high demand could be partly a result of the upcoming large redemption of almost RON9bn from 24 April, as some players are looking to rollover their investments.

The National Bank of Romania organized a one week deposit taking auction yesterday which anchored the front end even more firmly around the key rate. 9 banks placed a total of RON940m with the central bank.