Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, declined on Thursday for the sixth day in a row to 2.88 percent, the lowest level since June 7, 2018, on high liquidity in the market.
On Wednesday, 3-month ROBOR was 2.90 percent.
The 6-month ROBOR decreased to 3.22 percent, the lowest level since June 25, 2018.
Compared with the end of 2017, the 3-month index rose by 0.83 percentage point, from 2.05 percent. The 3-month ROBOR index reached a record low of 0.68 percent in September 2016.
Since the end of November, the National Bank of Romania has stopped injecting liquidity into the money market through a repo operation (government securities-backed lending to banks), a move designed to address liquidity shortage – and to cap interest rates in the market.
This new decline of money market rates is mainly due to high liquidity in the market, according to analysts.
„The National Bank of Romania monthly bulletin has shown a surplus liquidity of RON 1.9 billion for December 2018. January is usually not a month of impressive budget spending (actually a budget surplus is more traditional this month), though the current market rates suggest that some spending did occur most likely in the first days of 2019,” ING Bank analysts say in a research note released on Thursday.
The Romanian government has recently introduced a tax on bank assets of 0.3 percent from January 1st, 2019, calculated at the current ROBOR 3M-6M level.