Briefing Romania

Range trading again for the EUR/RON, with the 4.7400-4.7500 band quickly turning into an area of equilibrium. The downside potential seems limited by fundamentals while on the upside we are already close to historic highs. Hence, absent any major events, we look for the same range to hold.

The Ministry of Finance plans to sell RON400 million of June 2023 bonds. We expect good demand as the tenor is suitable for a broad range of investors. Hence, the allocation could be upsized again while yield-wise we look for an average around the secondary market offers of 4.07%.

Implied funding rates continued to trade below the 2.50% key rate, in an otherwise pretty calm market. The status quo will likely be maintained until the National Bank of Romania's decision on Monday on whether to hold a deposit auction.