Briefing Romania

Yesterday, the EUR/RON had one of its quietest days in a while, trading within 20 pips around 4.7320 on very low turnover. As expected, the current account data didn’t stir the market, despite showing a 33% widening for the first five months of 2019 versus the same period of 2018.

Romanian government bonds seem to be back in fashion as the curve shifted another 5-7 basis points lower, particularly in longer tenors. The April-2026 auction came out strong demand-wise, with RON500 million allocated at 4.35/4.36% average and maximum yields out of a total demand of RON1.03 billion.

The central bank’s deposit auction gathered quite an impressive RON17 billion from 21 participants, revealing an abundant liquidity surplus. We expect the cash rates to resume their downward trend and inch below 2.00% again.