Romanian Leu Retreats From Two-Month High; Bond Yields Decline
Romania’s leu retreated from its strongest level in two months and foreign bond yields fell.
The leu weakened 0.2 percent to 4.5147 at 5:16 p.m. in Bucharest, depreciating for the first time in four days. It gained 0.2 percent yesterday to the highest since Sept. 19. Yields on 2019 Eurobonds declined six basis points, or 0.06 percentage point, to 4.7 percent, according to data compiled by Bloomberg.
German Finance Minister Wolfgang Schaeuble signaled today Greece may need additional help. European finance ministers cut the rates on Greece’s bailout loans yesterday, suspended interest payments for a decade and engineered a Greek bond buyback. Greek banks control about 13 percent of Romania’s banking industry, the third-biggest market share, according to data from Banca Nationala a Romania.
“Some of the initial optimism started to wane off as investors grew wary of the proposed debt buyback scheme,” Mihai Patrulescu, a Bucharest-based economist at UniCredit Tiriac Bank SA, wrote in a note today.
Romania’s central bank capped lending at 4 billion lei ($1.1 billion) in a repurchase agreements auction on Nov. 26, extending its limit on weekly funding introduced on Oct. 8. The bank offered 12 billion lei at the sale on Oct. 1. Commercial banks are the biggest investors in the nation’s weekly debt sales.
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