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RON: Further clarity on the CHF loan bill, we’re still bearish RON

 

Based on discussions at committee level yesterday, it now looks like the plenum of the Chamber of Deputies will vote on CHF loan relief bill today. The amended proposal should see only CHF (not EUR) loans converted at the historical exchange rate, with the criteria that the beneficiary is: i) a consumer ii) has a max value of a loan at CHF250,000 and iii) whose debt to income ratio is greater than 50%. While the amendments suggest the amount will be lower than the RON5.7bn we discussed last week, we still think a sizable FX flow can hit the market and keep RON sentiment bearish. We look for EUR/RON to push up to the 4.54 area, where the NBR may take more of an interest in limiting RON depreciation now that their amendments to the bill have been incorporated.