Romania’s 3-month ROBOR hits fresh 4-year high for 6th day in a row

Romania’s three month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, increased on Thursday for the sixth day in a row to reach a fresh record high of the last four years and one month of 3.16 percent, National Bank of Romania (BNR) data show.

The ROBOR 3M calculated for June 28, 2018, is the highest since May 7, 2014. The 3-month rate rose by 0.01 percentage point from the previous market session.

Compared with the end of 2017, the 3-month index rose by 1.11 percentage point (+54 percent), from 2.05 percent.

The 3-month ROBOR index reached a record low of 0.68 percent in September 2016.

The 6-month ROBOR index stood at 3.23 percent on Thursday, slightly below the 4-year high level.

On May 7, Romania’s central bank raised the monetary interest rate from 2.25 percent to 2.5 percent, the highest level since February 2015, in line with economists’ expectations, who see the decision as a consequence of upward revision of the inflation forecast.

Analysts say the 3-month money market rate should be above the central bank’s policy rate.

Romania’s central bank also had weekly open market operations during the last couple of months, absorbing excess liquidity in the market. On Monday, Romania’s central bank absorbed only RON 54 million through one-week deposit tender, compared to RON 5.5 billion on June 18.