Romania’s 3 month ROBOR hits fresh 3y7m high of 2.89 pct

Sorin Melenciuc 08/06/2018 | 11:09

Romania’s three month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, reached on Friday a new record of the last three years and seven months of 2.89 percent, National Bank of Romania (BNR) data show.

The ROBOR 3M calculated for June 8, 2018, is the highest since October 14, 2014. The 3M rate rose by 0.02 percentage point from the previous market session.

Compared with the end of 2017, the 3-month index rose by 0.84 percentage points, from 2.05 percent.

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 eight open market operations during the last eight weeks, absorbing excess liquidity in the market.

But central bank’s intervention on Monday absorbed only RON 286 million through 1-week deposit tender, compared with RON 6.2 billion on May 21 and RON 1.8 billion on May 29.

Experts estimate the 3-month money market rate will continue to grow until the end of this year, approaching 3 percent, if BNR rises the monetary policy interest rate to 2.75 percent in 2018.

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

The 6-month ROBOR index rose to 3.00 percent on Friday, a record high of the last three years and eight months (since September 30, 2014).

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