- EUR/RON to head toward 5.02 by the end of the year – ING
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EUR/RON to head toward 5.02 by the end of the year – ING
The highlight of the day will be the meeting of the National Bank of Romania. Economists at ING analyze RON's outlook.
NBR's hawkish tone to continue
In line with the market, we expect no change in the interest rate, which currently sits at 7.00%. We expect the NBR to maintain a hawkish tone and see the first rate cut only in January next year.
We saw the NBR let the Leu weaken slightly above the EUR/RON 4.95 level and the playing field is currently 4.95-4.97. We expect to see a similar move once or twice more before the end of the year, which should take EUR/RON to 5.02 by the end of the year.
Given the unclear timing, the spot market does not have much to offer. However, we believe this central bank approach will add pressure on the Leu, which will be an opportunity for the NBR to withdraw excess liquidity from the market and push interbank rates and FX implied yields back up.
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