WORLD ECONOMIC & MARKET DEVELOPMENTS
GREECE: The negotiations between Greece and its official creditors (i.e. EC, ECB, ESM and IMF) on a 3rd bailout programme are making progress according to local media. The Greek Finance Minister Euclid Tsakalotos reportedly stated that the negotiations are going better than expected, whereas the EC spokeswoman Mina Andreeva was quoted saying that work was moving to the right direction and that reaching an agreement in time for Greece to meet the 20 August ECB €3.4bn bond payment “is ambitious, yet realistic”.
SOUTH EASTERN EUROPE
ROMANIA: On August 4th, NBR left interest rates and MRRs for RON and FX denominated liabilities unchanged at 1.75%, 8% and 14% respectively in line with the consensus view and our expectations. In the press release and Governor Isarescu’s post-meeting press conference, the central bank provided more details on its views in a number of issues but at the same time provided no forward guidance with respect to the future rate setting in view of the rising fiscal slippage risks.
CESEE Markets: Most emerging-market currencies weakened on Wednesday morning session after mounting speculation that the Federal Reserve will raise interest rates in September. A hawkish statement made by the Fed Bank of Atlanta President Dennis Lockhart in an interview with the Wall Street Journal that it would take a significant deterioration in economic data for the central bank to delay an adjustment in September, has put pressure on emerging market currencies.
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