Briefing Romania

We saw sideways trading in EUR/RON, which closed near 4.7600 after a failed test lower towards 4.7550. The same scenario is expected today with exporters likely to continue to sell hard currency to cover quarterly payments to the state budget.

The government bond yield curve bull steepened as front-end buying continued ahead of a RON8.8 billion bond redemption on 29 April. Back-end yields closed little changed with 10-year yields at 4.94% mid.

Cash rates ended the reserve maintenance period near the NBR deposit facility of 1.50%. Large payments to the state budget due 25 April and calendar effects due to holidays are pushing funding rates above the NBR credit facility of 3.50% at the start of the new reserve maintenance period.