Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, rose on Monday to 2.97 percent, the highest level since January 4, on lower liquidity in the market.
On Friday, 3-month ROBOR was 2.93 percent.
The 6-month ROBOR increased to 3.28 percent, the highest level since January 7.
Compared with the end of 2018, the 3-month index declined by 0.05 percentage point, from 3.02 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.
But last Monday, BNR has sterilized the excess liquidity in the market through a deposit tender of RON 12.9 billion.
The rise of money market rates is mainly due to liquidity issues.
„A rollover of the one-week deposit-taking auction from the NBR is not likely to generate much demand but at least it could signal central banks’ stance against the current liquidity surplus backdrop,” ING Bank analysts say in a research note released on Monday.
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.