Issuance needs in CEE

Erste Bank Research Team Erste Bank

On the radar

Key policy rate remained unchanged in Poland (3.75%) and in Romania (6.5%).
Serbia’s central bank interest rate decision is due today.
Czechia and Slovakia will release industrial output in May.
Czechia will also show share of unemployed.
Croatia will release tourism arrivals and trade balance.

Economic developments

In the latest CEE Bond Market report: Fear of rate hikes is fading away; we discuss fiscal position and year-to-date financing needs in the region. Most CEE countries have already completed more than half of their planned full-year issuance, although the Middle East conflict has had a negative impact on bond markets. As Romania has been awaiting a resolution to the political crisis, issuance remained relatively moderate in order to ease pressure on pricing. On the other hand, a better-than-expected YTD cash deficit supported lower issuance volumes. There are no redemptions of government securities in Slovakia and Serbia in 2H26. Overall, we see limited fiscal space in most countries. CEE bond markets have benefited from improving inflation dynamics and receding rate hike expectations. Long-term yields have declined from their March peaks. Risks and uncertainty remain high, however.

Market movements

As widely expected, Polish and Romanian central banks kept policy rate unchanged on Wednesday at 3.75% and 6.5% respectively. In Poland, we stick to the view that there will be no policy rate changes this year. The projection seems consistent with this. Adam Glapiński’s press conference is scheduled for today at 3 PM CET. In Romania, the statement is best characterized as a slightly hawkish hold rather than a dovish one, in our view. While the NBR kept the policy rate unchanged, its communication highlights several persistent inflation concerns suggesting policymakers are not yet comfortable discussing near-term rate cuts. Today, we expect stability of rates in Serbia. Hungary sees budget deficit at 7.5% in 2026 and outlined the steps to tackle the deficit. Global situation has changed relatively abruptly as the US military struck Iran for the second straight day. Brent price of oil increased toward USD 78 per barrel. CEE currencies have weakened against the euro with EURHUF moving the most toward 360. Long-term yields have increased.

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Erste Bank Research Team

Erste Bank

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