The Middle East conflict is already affecting the stock markets and interest rates, and the impact could become more severe if the situation drags on, Adrian Codirlasu, president of the Chartered Financial Analysts (CFA) Romania Association, explained on Wednesday for AGERPRES.
"What scared the European markets was the sharp rise in natural gas prices in recent days. In this context, European stock exchanges recorded significant declines, and in Japan the drop was even steeper. This is a rise in risk aversion. In such situations, stock markets fall and government bond yields increase. These negative developments have been visible across all market segments," Adrian Codirlasu said.
Asked how long this period of volatility might last, he noted that it is difficult to make estimates given the unpredictable nature of a military conflict.
"It is impossible to forecast exactly what will happen. If only the price of oil had been affected, the situation would have been easier to manage. But the rise in natural gas prices complicates the outlook, as gas is also used to produce electricity. Higher energy prices can spread throughout the economy, slowing economic growth and adding pressure on inflation. This explains the negative market reaction," Codirlasu stated.
According to him, the duration of the conflict is essential for assessing the economic impact.
"In the short term - one to two weeks - the effects may be limited. But if the situation continues for more than a month, the impact becomes more severe, because existing stocks will be depleted and must be replenished at higher prices, which will be reflected in higher inflation," the CFA Romania president explained.
It should be noted that banks did not participate on Tuesday in the non-competitive bid sessions related to Monday's auctions, when the Ministry of Finance borrowed 994 million RON, according to data from the National Bank of Romania. The three-month ROBOR index, used to calculate interest rates on variable-rate consumer loans in RON rose on Wednesday to 5.94% per year, from 5.76% per year in the previous session.
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