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Romania Central Bank Levitates Policy Rate to 5.5%

CEE
  • Romania central bank (RCB) eased down the pace of its tightening cycle and delivered a 75bps hike at today's meeting, levitating the policy rate to 5.5% (vs. 5.75% exp.)
  • It is the eighth time that RCB is hiking rates, its policy rate is now up 425bps since its low reached in 2021.
  • Today's 'dovish' hike was not a surprise given the recent decisions from CEE policymakers (i.e. CNB maintained rates steady) as central banks have started to consider the growth side of the equation at the latest meetings.
  • CPI inflation surged to 15.05% in June, its highest level since October 2003, diverging significantly from the central bank's 1.5%-3.5% target.
    • July inflation print will come out on August 11, with CPI expected to decelerate to 14.8% YoY.
  • The ease in rick aversion has been supporting the RON in recent weeks, with USDRON slowly consolidating towards its 4.80 support.
    • Next level to watch on the downside stands at 4.7630 (50DMA).

Source: Bloomberg/MNI

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