Briefing Romania

High carry rates and slightly better risk sentiment pushed the EUR/RON below 4.7500 yesterday, on above-average turnover. We could see some tests below 4.7450 today, but we don’t expect a sustained appreciation trend for the leu. Over the coming months we rather see the pair relatively stable in the 4.7500-4.7700 range.

A strong Sep-2031 bond auction managed to somewhat animate an otherwise numb ROMGB market. The Ministry of Finance allocated RON200 million at 5.21% average and 5.24% maximum yields. Total demand stood at RON585 million versus the RON200 million target.

Funding rates remained relatively stable at these high levels. In fact, implied yields up to 1Y are all above 4.00% now, a first after quite some time.