Briefing Romania

Even though the EUR/RON is getting close to uncharted territory, the market remained impressively stable yesterday and traded well within our 4.7700-4.7800 expected range. With regional currencies appreciating, we could see some respite in the upward pressure on the pair.

The fixed income market remains very quiet these days, with a bit of repricing here and there along the curve but no meaningful shift in yields. 10Y yields traded slightly below 4.50%, a level from which they have rallied a couple of times this year.

As expected, paying interest in FX swaps prevailed given the FX pressures, pushing the 3M-1Y curve some 5-10 basis points higher to around 3.25%. This paying interest could continue a bit given the diminished but still present FX pressure and a likely increased appetite for funding from the Ministry of Finance.