19.1 C
March 5, 2021

ING: A government run by PSD would more prone to fiscal experiments

A government run by PSD would more prone to fiscal experiments like the draft on restructuring people’s loans (‘Electorate’) and the underlying risk that the agreement with the IMF and EU could be terminated is increasingly high, ING Bank analysts warned after USL fell apart. Analysts reiterated that if Hidroelectrica becomes insolvent again, the Executive will most likely miss the June 30 deadline agreed-upon with the IMF for listing the company.
“Even though such an announcement was largely to be expected after negotiations between the two parties failed the day before, the fact that the news was run by international news agencies could still cause the leu to depreciate,” bank analysts said further.
Such tendencies could be mitigated if a new government is established immediately and “concerns related to potential official interventions will probably lessen the depreciation pressure,” analysts say. The RON/EUR exchange rate reported small fluctuations in the first part of yesterday’s trading session, as players reacted moderately to the split in the governance alliance. Quotations went up in the first hour of trading to RON/EUR 4.5200, the value at which most trading activities were conducted. The lowest level traded in the first part of the day was RON/EUR 4.5120 and the maximum was RON/EUR 4.5200.
The reference exchange rate announced by the National Bank of Romania (BNR) dropped slightly to RON/EUR 4.5144, with a parity 0.29 bani (0.06 per cent) below the value reported Tuesday, of RON/EUR 4.5173.

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