LONDON (Reuters) - JPMorgan said on Monday that an election win by Romania's centrist Bucharest mayor Nicusor Dan is reducing political risk ahead and that a sovereign ratings downgrade to below
Romania's Political Risk Reduced After Dan's Election Victory
LONDON (Reuters) - JPMorgan said on Monday that an election win by Romania's centrist Bucharest mayor Nicusor Dan is reducing political risk ahead and that a sovereign ratings downgrade to below investment grade was now less of a concern.
The Wall Street bank adjusted its forecasts following Sunday's runoff election, saying it now expected a "moderate devaluation" for the country's currency. It predicts the leu at 5.10 versus the euro by the end of the second quarter and at 5.25 by year-end, according to a note.
JPMorgan also moved its exposure on Romania's international bonds to "marketweight" from "underweight" and to "overweight" from "marketweight" on local government bonds.
"The process to form a majority remains tricky," Nicolaie Alexandru-Chidesciuc at JPMorgan said. "In a best-case scenario, a government might be in place by mid-June and a fiscal package might be, in a best-case scenario, approved by end-June."
Dan won the country's presidential election in a shock upset over a hard-right, nationalist rival who had pledged to put Romania on a path inspired by U.S. President Donald Trump's politics.
(Reporting by Karin Strohecker; Editing by Dhara Ranasinghe)
