Finance
Romanian leu falls back as central bank keeps rate cut in view
Published by Global Banking & Finance Review®
Posted on May 20, 2025
4 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 20, 2025
4 min readLast updated: January 23, 2026
The Romanian leu fell 0.9% against the euro as the central bank considers a rate cut in 2025. Nicusor Dan's election win impacts market sentiment.
WARSAW (Reuters) -The Romanian leu pulled back on Tuesday, halting a post-election rally as the central bank said a rate cut could still come later this year.
By 0945 GMT the Romanian leu had dropped 0.9% against the euro to 5.0844, giving back most of the gains it clawed back after Sunday's surprise presidential election victory of centrist Nicusor Dan over a hard-right rival.
Romanian central bank Governor Mugur Isarescu on Tuesday, speaking for the first time since the leu fell to record lows in the election run-up, said the bank could discuss interest rate moves once the perception of the country's markets improves and capital that left returns.
Conditions were being created for a rate cut in the second half of 2025, he said, with inflation seen coming down.
The leu retreated with the comments - while domestic bond yields were a touch lower - highlighting market fragility in Romania where the next president still must find a new prime minister and install a government that can tackle Europe's biggest fiscal deficit.
"For sure, markets were pleased by the win of centrist candidate Dan but investors are very well aware of the fact that a lot of has to be done in terms of correction of notorious imbalances," Generali Investments CEE analyst Jakub Kratky said.
"That said, any news like a dovish comment or reminder made by Isarescu could change the tide pretty swiftly."
Markets had fallen earlier in May when nationalist George Simion had a strong first-round showing, raising worry over shifting policies that would add fiscal pressure and put Romania's rating at risk.
The central bank intervened with "large sums" the day after the first round, according to Isarescu, but could not protect the leu for falling past 5 per euro for the first time ever.
Isarescu said the market had "underestimated" how much central bank had spent to defend the leu, which shed as much as 3% and is still down around 2% since before the election.
In Poland, which held the first round of its presidential election on Sunday, the zloty edged 0.1% higher to 4.2440 per euro, remaining within the range it has largely been trading in since mid-May.
Sunday's voting result pits a liberal candidate from Poland's main ruling party (KO) against a conservative contender backed by the former ruling party (PiS) in a run-off on June 1, which will keep markets on edge.
In Hungary, the forint eased 0.2% to 402.40 per euro, pulling back from its strongest standing since early April, hit on Monday, and returning to the level it ended the previous week.
Elsewhere the Czech crown was flat at 24.9030 per euro.
CEE MARKETS SNAPSHOT AT 1145 CET
CURRENCIES Latest Previous Daily Change in
trade close change 2025
Czech 24.9030 24.8920 -0.04% +1.23%
crown
Hungary 402.4000 401.6500 -0.19% +2.24%
forint
Polish 4.2440 4.2465 +0.06% +0.77%
zloty
Romanian 5.0844 5.0395 -0.88% -2.12%
leu
Serbian 117.2300 117.2400 +0.01% -0.24%
dinar
Note: daily change calculated from 1800 CET
STOCKS Latest Previous Daily Change in
close change 2025
Prague 2179.04 2179.9600 -0.04% +23.80%
Budapest 96681.98 96394.92 +0.30% +21.88%
Warsaw 2793.02 2786.70 +0.23% +27.42%
Bucharest 17416.03 17445.26 -0.17% +4.16%
BONDS Yield Yield Spread Daily
(bid) change vs Bund change in
spread
Czech Rep 3.3700 -0.0010 +154bp +1bps
2-year s
Czech Rep 3.6720 -0.0280 +154bp -3bps
5-year s
Czech Rep 4.2290 -0.0020 +165bp +0bps
10-year s
Poland 4.6450 -0.0540 +282bp -5bps
2-year s
Poland 5.0520 -0.0780 +292bp -8bps
5-year s
Poland 5.4960 -0.0530 +292bp -5bps
10-year s
FORWARD RATE 3x6 6x9 9x12 3M
AGREEMENTS interbank
Czech Rep 3.38 3.25 3.14 3.51
Poland 4.81 4.39 4.05 5.22
Note: FRA quotes are for ask prices
(Reporting by Karol Badohal in Warsaw, Luiza Ilie in Bucharest and Anita Komuves in Budapest; Editing by Shreya Biswas)
The main topic is the decline of the Romanian leu and the central bank's consideration of a rate cut following recent elections.
The Romanian leu fell 0.9% against the euro, giving back gains from a post-election rally.
The market is fragile with bond yields slightly lower, and concerns over Romania's fiscal deficit remain.
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