Snaps
7 October 2019

Briefing Romania

RON500 million for sale in Aug-2022 auction

Romania_in_Europe.jpg

 - Source: Reuters
Source: Reuters

EUR/RON

The Romanian leu seems to have found a new comfort zone for a while in the 4.7400-4.7550 range, with fundamentals limiting the downside and official offers the upside. Nevertheless, the market could turn volatile again as we are approaching the no-confidence vote scheduled for Thursday 10 October.

Government bonds

The local bond market continues to benefit from the weak external data which increases expectations for more easing by the major central banks. The back-end of the yield curve inched another four to five basis points lower on a rather thin market. Today the Ministry of Finance auctions RON500 million in Aug-2022. The tenor is usually more suitable to local demand and we expect an average allocation towards the secondary market bids of 3.50%.

Money market

Cash rates remained stable around 2.50%. Today’s central bank deposit auction shouldn’t see much higher demand than last week‘s RON1.58 billion.

 - Source: Reuters, ING estimates
Source: Reuters, ING estimates