Romania’s 3-month ROBOR hits fresh 6-month low of 2.92 pct

Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, declined on Tuesday to 2.92 percent, the lowest level since June 18, 2018, on higher liquidity in the market.

On Monday, 3-month ROBOR was 2.94 percent.

The 6-month ROBOR decreased to 3.27 percent, the lowest level since June 29, 2018.

Compared with the end of 2017, the 3-month index rose by 0.87 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 higher liquidity in the market, according to analysts.

„ Cash rates continue to trade below the key rate on ample liquidity conditions and we could soon hit the deposit facility of 1.50 percent,” ING Bank analysts say in a research note released on Tuesday.

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.

The market awaits today’s central bank board meeting.