Briefing Romania

The EUR/RON traded sideways yesterday in a tight 4.7450-4.7500 range, testing the lower bound of the interval after the 10Y bond auction, which likely gathered some interest from offshore investors. Range for today: 4.7450-4.7550.

Long-end ROMGB yields declined around 5 basis points yesterday, helped by a good 10Y auction result. The Ministry of Finance sold the planned amount of RON500 million at an average/cut-off yield of 4.11%/4.13% - the lower end of expectations. The bid-to-cover ratio was 1.5x. Some unfilled demand is likely to keep the long end well bid today.

Despite budget payments the day before, the cash rate dropped c.50bps to 2.70% leading to a steepening of the forward curve.