EURRON to 4.2 by end of March?

In recent years the Ministry of Finance has used the first quarter to borrow most its funding needs for the year. The signal was given by very low rates in the money market at short maturities. With low funding costs and still high real interest rates the demand for Romanian debt at maturities up to one year was strong from both local and foreigners. One collateral effect of this is a stronger RON in the first part of the year.

As the graph shows the RON appreciates in the first part  of the year and then depreciates for the rest. There is also  a degree of correlation with global market which have followed  a similar pattern – equity indexes reached their highs of the year by April.

So far this year we are seeing the same behavior with low MM rates and MoF borrowing aggressively at maturities up to 1 year with real rates above 2%. In the same time global markets are following a similar pattern and I believe that by April the “optimism” from bailing out Greece will be tested by the reality of having to bailout more countries in Europe.  But until then  EURRON has a potential to move to 4.2. My view is that it will get there.

9 thoughts on “EURRON to 4.2 by end of March?

  1. Florin, tinand cont de volatilitatea EUR din ultima perioada oare volatilitatea RON nu ar trebui masurata versus un cos de valute ponderate astfel incat sa aibe legatura cu economia romneasca? A spune ca RON se duce in 4.2 poate da o impresie falsa de apreciere, dar ce te faci daca in acelasi timp EUR/USD se duce in 1.15?

    1. @i-conomics
      Am luat in calcul si EURUSD care din punctul meu de vedere nu se duce in 1.15 pana in Aprilie. Dupa Aprilie este altceva. In continuare cred ca EURUSD aici este “ciaudat”. Dar nici nu va cadea atata timp cat europa ofera finantare ieftina pe termen mediu bancilor pentru a finanta datorii suverane la 6% sau 7%.

  2. Daca EURUSD se duce in 1.15 atunci mai degraba EURRON se duce in 4.45 (in ton cu restul valutelor emergente) nu in 4.2. E vorba de risk aversion, nu de slabiciunea EUR.

  3. dle Citu,eu iarasi sunt cu efect intarziat ,adicia nu la subiect.azi ti-am citit cu atentie articole pe care le ai in finantisti.cel in care faci comparatie intre ungaria si romania ma face sa-ti pun o intrebare .daca fmi ii cere ungariei introducerea intitutiei falimentului personal, atunci de ce te intrebi in alt articol :De ce indivizii nu pot da faliment, precum companiile?, pai daca exista institutia asta de ce nu o aplicam si la noi? nu mi-e clar.

    1. @Gabriela
      La noi persoanele fizice nu pot da faliment. Companiile au mai dat si astfel au fost protejate de crditori si au putut sa se restrctureze. Flamingo, Diverta, Spar, etc.

  4. in ce priveste inarirerea leului fata de euro ce pot pricepe eu asa fara sa fiu in mintea BNR , cred ca daca BCE va mai veni cu acea anuntata injectie dubla de aproape o mie de miliarde in final de februarie atunci poate specialistii BNR sunt deja vizionari.

  5. aqm citit articolul dvs , am inles ca la noi nu pot da,dar intrebarea mea era de ce impune fmi asa o lege in ungaria, ea exista????ca asa scrieti in articol, ca le-o impune ungurilor fmi

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