Romania’s 3-month ROBOR hits 7-week low on higher liquidity

Sorin Melenciuc 28/11/2018 | 12:21

Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, declined on Wednesday for the third day in a row to 3.13 percent, the lowest level since October 9, on higher liquidity in the money market.

On Tuesday, 3-month ROBOR was 3.16 percent.

The 6-month ROBOR decreased to 3.38 percent, the lowest level since October 5.

Compared with the end of 2017, the 3-month index rose by 1.08 percentage point, from 2.05 percent.

On Monday, National Bank of Romania injected RON 10.2 billion (EUR 2.2 billion) 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 higher liquidity generated by the central bank’s move.

“Selling interest continued on the money market on improved liquidity conditions with most of the curve now trading inside the 2.50-3.50 percent corridor. We believe that the downward trend in rates is not likely to last long as the National Bank will be careful not to allow a persistent liquidity surplus in the market,” ING Bank said on Wednesday, in a research note.

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

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