Briefing Romania

The bond driven inflows continue to pressure EUR/RON on the downside. For now we see limited potential in any direction, hence stable FX is the name of the game these days.

It’s more of the same on the fixed income market, with the local and global investors searching for yields wherever they can. This time it was the RON600 million April-2026 auction that amazed the market with a RON1.8billion demand and 3.90% average and maximum yields for the target amount, simply ignoring the slightly higher than expected CPI numbers. This was quite an aggressive bid in our view but who can say that the trend isn’t going that way?

The National Bank sterilised RON4.98 billion in its one week deposit auction, which left market rates trading flat, just above the 2.50% key rate. After yesterday’s inflation data, we don’t expect any changes in liquidity management before 4Q19.