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Romania Cannot Afford Weaker RON Due To Fast CPI Passthrough

CEE
  • Romania Central Bank (RCB) governor Isarescu mentioned in press conference that Romania cannot afford weaker RON due to Fast CPI Passthrough.
  • As a reminder, inflation accelerated to 13.8% YoY in April (vs. 11.1% exp.), up from 10.2% the previous month.
  • As a result, RCB accelerated the pace of its tightening cycle and hiked its policy rate by 75bps to 3.75% this week (vs. 50bps exp.).
  • It is the sixth time that RCB is hiking rates, its policy rate is now up 250bps since its low reached in 2021.
  • Another 'aggressive' hike from Romania Central Bank, which decided to follow its CEE peers and started to raise its policy rate in October 2021 (see chart below).
  • USDRON has been trending higher this morning, breaking above its 4.7250 resistance and currently trading at a new all-time high.

Source: Bloomberg/MNI

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  • Romania Central Bank (RCB) governor Isarescu mentioned in press conference that Romania cannot afford weaker RON due to Fast CPI Passthrough.
  • As a reminder, inflation accelerated to 13.8% YoY in April (vs. 11.1% exp.), up from 10.2% the previous month.
  • As a result, RCB accelerated the pace of its tightening cycle and hiked its policy rate by 75bps to 3.75% this week (vs. 50bps exp.).
  • It is the sixth time that RCB is hiking rates, its policy rate is now up 250bps since its low reached in 2021.
  • Another 'aggressive' hike from Romania Central Bank, which decided to follow its CEE peers and started to raise its policy rate in October 2021 (see chart below).
  • USDRON has been trending higher this morning, breaking above its 4.7250 resistance and currently trading at a new all-time high.

Source: Bloomberg/MNI