Romania Briefing

The EUR/RON traded in a tight 4.7600-4.7700 range yesterday on heavy turnover. Clustered trading at 4.7650 is indicative of official offers. With the upside limited by the NBR and the downside by the fundamentals, 4.7550-4.7650 range could hold in EUR/RON for today.

ROMGBs' yield curve shifted higher yesterday with the weak auction for June-2023 bonds exacerbating the selling pressure. MinFin sold RON392.5m bonds, below the RON500m target, with total demand at RON443.5m. A dovish NBR today could be somewhat supportive for RON debt.

Cash implied rate was little changed around 4.20% with the NBR not providing liquidity via an open market operation despite the shortage, likely aiming at discouraging positioning for a weaker RON. The 3M-1Y segment remained inverted from 4.00% to 3.75%. RON8.8bn bond redemption on 29 April should restore the equilibrium in liquidity, though large quarterly payments to the state budget ahead of it are likely to lead to another squeeze.