Romanian leu flat after govt friction, most shares move in tight range

BUCHAREST: The Romanian leu was flat on Thursday after Liberal Prime Minister Florin Citu fired the health minister and potentially endangered his coalition government, while other central European currencies and stocks moved in a tight range.

The dismissal of Health Minister Vlad Voiculescu marks the first big conflict in the centre-right governing coalition formed after a parliamentary election in December, as his junior USR-Plus party was blindsided by the decision.

At 0945 GMT, the leu was flat against the euro at 4.9255 and bluechip index traded 0.1% higher, as markets bet political tensions would die down.

"It is highly unlikely that USR-PLUS will ... force the collapse of the ruling coalition, in the middle of peak COVID-19 hospitalizations," JP Morgan said in a note. "A functioning government and majority are highly needed at this time."

"As long as the majority in parliament survives, ... there are no meaningful macro implications."

Romanian debt managers would tender 500 million lei worth of October 2023 treasury bonds later in the day.

"The political crisis is coming at a bad moment," Commerzbank said in a note. "The coalition government had only just managed to convince the rating agencies that it is being serious about consolidating the household budget that was getting out of control."

Elsewhere, the Czech crown was up 0.1% against the euro, while the Polish zloty edged 0.1% lower.

The Hungarian forint slid 0.1% and was trading at 359.1 to the euro.

"The forint is at important levels. The next resistance level after that is 360," brokerage Equilor wrote in a note.

Hungary's biggest lender OTP is in talks to buy Slovenian bank Nova KBM from private equity group Apollo in a deal worth roughly 1 billion euros ($1.2 billion), people close to the matter said.