WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The common currency continued its downward trend amid rising concerns about European politics, including France’s presidential elections where uncertainty prevails over the outcome of the two rounds scheduled for April 23rd and May 7th. Against this background, the EUR/USD slipped to a one-week low of 1.0643 retreating from last week’s nearly two-month high of 1.0829. The upcoming election cycle in Europe has also weighed on European government bond yield spreads, with the French-German respective one widening to 78bps earlier in the day, the highest level since late 2012. In commodities markets, crude oil prices declined as a sharp increase in US inventories and a decline in Chinese demand pointed to an oversupply of crude in the oil market despite last year’s agreement between OPEC and non-OPEC members to cut oil output.
GREECE: In the aftermath of the IMF’s DSA and economic review on Greece, Greek Finance Minister Euclid Tsakalotos defended the progress that has been made in the context of the 3rd Economic Adjustment Programme, pointing out to the significant reforms in the social security system, the pensions system and the products market as well as in improving tax collection through the establishment of the Independent Authority for Public Revenue. The Governor of the Bank of Greece Yannis Stournaras claimed, among others, that the IMF’s concerns regarding Greek banks’ capital adequacy are unjustified given that their capital ratio is among the highest in the EU and the ongoing efforts to manage NPLs are expected to strengthen it further.
SOUTH EASTERN EUROPE
ROMANIA: The Constitutional Court ruled on Tuesday that the CHF loan conversion is unconstitutional. In other news, the Central Bank of Romania kept the key policy rate at the current historic low levels of 1.75% at its monetary policy meeting on Tuesday, as was broadly anticipated. The Central Bank also announced yesterday its decision to maintain unchanged the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.
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