The leu rose for a second day after Romania’s central bank capped funding for lenders at its one- week repurchase agreements auction, tightening money supply.
The currency gained less than 0.1 percent to 4.5738 per euro at 12:18 p.m. in Bucharest, according to data compiled by Bloomberg. Yields on 2018 euro-denominated bonds fell one basis point, or 0.01 percentage point, to 4.063 percent.
The central bank capped lending to commercial banks at 6 billion lei ($1.7 billion) on Oct. 15 for a second time this month, supporting the leu. Demand for funding at the one-week repo auction rose to a record high of 21.4 billion lei. The bank’s decision to limit liquidity for commercial banks on Oct. 8 followed the currency weakening to a two-month low on Oct. 5.
The central bank’s “liquidity management kept losses in check,” BRD-Groupe Societe Generale SA (BRD) analysts wrote in a note to clients today.
The analysts expect the leu to trade between 4.55 per euro and 4.60 per euro today, according to the note.
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