”We recall that regional currencies softened sharply in the past when news about such initiatives arose and now, both large parties in Romania seem to support this bill. However, ahead of next week’s potential final vote on this bill on Tuesday, as suggested by some of the bill’s backers, the RON softening may take a break for now and possibly take its direction from today’s major events,” ING Bank said in a report.
The CHF loan conversion bill, currently on the agenda of the Parliament, stipulates the conversion of Swiss franc loans into RON at the historical exchange rate.
The representatives of the Romanian Banking Association (ARB) stated that such an initiative would excessively boost lenders’ costs.
International currency trends are also impacting the depreciation of the leu.
“The biggest one for global markets will be the US labor market report, which ING sees as further building the case for a Fed hike as soon as December, potentially leading to softening pressures on domestic assets,” ING said.
According to ING analysist, the Romanian leu “might trade sideways around the previous close, but the bias still looks tilted towards softening”.