CFA Romania: Average 3-month ROBOR Index of 4.16pc, average exchange rate of RON 4.7688 per EUR in the next 12 months

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Economic analysts expect an average inflation rate of 4.66% over the next 12 months, an increase of the 3-month ROBOR Index up to 4.16% and an exchange rate of RON 4.7688 for one EUR, reveals the Macroeconomic Confidence Index for July, released on Friday by CFA Romania.

According to the data analyzed by the CFA Romania survey, in terms of EUR/RON exchange rate, about 85% of participants anticipate a depreciation of the national currency over the next 12 months as compared to the current value. Thus, the average expectation for the six-month horizon is RON 4.7224, while for the 12-month horizon the average value of the expected exchange rate is RON 4.7688.

Also, the forecast on the inflation rate for the next twelve months (July 2019/July 2018) is on average 4.66%.

The average 3-month ROBOR Index over the next 12 months is 4.16%, while the yield on sovereign bonds denominated in RON with a maturity of 5 years is 5.28%. As a result, given the anticipated inflation rate, for the short-term maturities, negative real interest rates are still anticipated, CFA Romania informs.

In regard to CFA Romania’s Macroeconomic Confidence Index, it rose by 1.4 points in July as compared to the previous month, up to 45.1 points, while in July 2017 the same index had decreased by 14.5 points.

At the same time, the Current Conditions Index decreased by 2.1 points against the previous month to 59.8 points as compared to the same period last year, when the same index had fallen by 15.2 points.

The Expectations Index increased by 3.1 points, reaching 37.8 points, whereas in July 2017 the index had decreased by 14.2 points.

More than 76% of participants anticipate an increase in the country’s risk rate and the average expected value is 119 bps, up by around 25 bps against the current level.

CFA Romania’s Macroeconomic Confidence Index was launched in May 2011, quantifying financial analysts’ anticipations on the economic activity in Romania for a time horizon of one year.

The survey is conducted during the last week of each month, and participants are members of CFA Romania and candidates for levels II and III of CFA exams.

Macroeconomic confidence index can range from 0 (no confidence) to 100 (complete confidence in the Romanian economy) and is calculated based on six questions.

CFA Romania is the association of investment professionals in Romania, holders of the title Chartered Financial Analyst, qualification administered by the CFA Institute (USA). CFA Romania is one of the 144 member companies of the CFA Institute and has over 160 members.

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