CEE: Stability of rates in Romania

The Romanian central bank meeting opens the week in the CEE region; we expect no change in the key policy rate. Another country that will be in focus is Poland, which will release industrial output growth in December, producer price growth, as well as wage and employment growth. Other than that, more labor data will be released in other CEE countries, namely December’s unemployment rates in Slovakia, Croatia and Hungary, as well as real wage growth in Croatia (November).

FX market developments

The FX market in the region was relatively stable throughout last week. Serbia and Poland’s central banks held the key policy rates flat at 5.75% and 4.0%, respectively. In both countries, we expect some monetary easing throughout 2026, however. Poland’s central bank Governor Glapinski confirmed that there is still some space for interest rates to go lower. We see the terminal rate at 3.5% at this point. This week, Romania’s central bank will hold a rate-setting meeting, from which we expect stability of rates. As far as other central banks in the region are concerned, Zamrazilova said that the inflation structure in Czechia is relatively unfavorable and is preventing more rate cuts. Hungarian central banker Kurali also tried to cool down the expectations for interest rate cuts that arose at the end of 2025. December’s inflation proved to be disappointing, as it arrived at 3.7% y/y, prompting caution and repricing interest rate cuts on the market (FRAs 6x9 up by roughly 10 basis points following the inflation release).

Bond market developments

Government bond yields in major markets continued to move sideways last week, despite a renewed attempt by the Trump administration to pressure the Fed chair. In CEE markets, Czech and Hungarian yields saw minor upward moves, reflecting some correction in FRAs after the previous rally. This week, the Slovak debt agency ARDAL plans to raise EUR 600mn through the re-opening of four SLOVGBs (2028, 2031, 2037, 2043). Overall, ARDAL intends to borrow EUR 10bn this year (we expect borrowing needs closer to EUR 11bn), with half of the gross issuance planned through two syndicated bond deals and up to EUR 0.5bn via retail bonds. Romania will reopen ROMGBs 2032, 2033 and 2040, targeting RON 700mn in papers with maturity below 10 years and RON 500mn in the longest paper. Czechia will reopen CZECHGBs 2034, 2035 and 2037. Hungary and Poland will also be offering various bonds. In addition, both Czechia and Hungary will be issuing T bills.

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