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15 May 2015
Easing cycle over in Romania? – Rabobank
FXStreet (Edinburgh) - Strategist at Rabobank Piotr Matys sees the Romanian central bank (NBR) could end its easing cycle with a last rate cut in May.
Key Quotes
“The NBR continued its monetary policy easing cycle so far this year cutting the key interest rate to a new historical low of 1.75% in May due to mounting deflationary pressures”.
“The central bank revised its year-end forecast for inflation to zero from 2.1% previously. Low inflation is likely to persist until well into 2016, according to the central bank”.
“That said, the 25bps move in May should mark the end of the easing cycle in Romania”.
“With the ECB still just at the beginning of its EUR 1.1trl asset purchases program, we prefer to be positioned for a sustainable break below the 4.40/38 support area at some stage this year”.
“It is important to point out that the NBR is likely to step in if the leu appreciates too fast”.
Key Quotes
“The NBR continued its monetary policy easing cycle so far this year cutting the key interest rate to a new historical low of 1.75% in May due to mounting deflationary pressures”.
“The central bank revised its year-end forecast for inflation to zero from 2.1% previously. Low inflation is likely to persist until well into 2016, according to the central bank”.
“That said, the 25bps move in May should mark the end of the easing cycle in Romania”.
“With the ECB still just at the beginning of its EUR 1.1trl asset purchases program, we prefer to be positioned for a sustainable break below the 4.40/38 support area at some stage this year”.
“It is important to point out that the NBR is likely to step in if the leu appreciates too fast”.