• In line with our expectations, on 4th February the National Bank of Romania cut the monetary policy rate by a further 25bps to 3.50%. We consider that the key rate cutting cycle ended with this decision, but also that the easing of monetary conditions will continue until the end of the year.
• The two-week visit of teams from the IMF and the European Commission to Romania for the combined first and second reviews under the IMF Stand-By Agreement and on the stage of Romania’s precautionary balance of payments programme with the EU, ended on 4th February, the summaries from the representatives of the two institutions being quite positive.
• Romania’s government prepared a new measure related to a debt restructuring scheme with certain fiscal incentives for low income persons, hoping to generate a series of benefits, including the improvement of consumption. The measure was also agreed by the IMF and EC representatives.
• Money market liquidity conditions improved last week, implying the decline of interest rates with maturities of up to and including one month.
• The Ministry of Public Finance organised two treasury securities auctions last week, but taking into consideration the increase of yields on the secondary market, it decided to postpone the twelve-month T-bills auction and to reject the bids for the seven-year T-bonds auction. However, today it raised the amount planned of RON 800m through a T-bond with residual maturity of three years at an average yield of 4.06%.
• The EUR/RON traded in a wider range of 575pips last week, with a high of 4.5025 reached on Monday and a low of 4.4450 (the lowest level of the last two months) reached on Wednesday.
• The EUR gained ground against the USD last week - with exchange rate rising from 1.3475 towards1.3640 - mainly supported by the ECB monetary policy decisions and by the worse-than-expected US employment data. 

Florentina Cozmâncă, Senior Economist
The Royal Bank of Scotland plc, Edinburgh, Romania Branc