Romania’s 3M ROBOR hits fresh 3-month high of 3.25 pct

Romania’s three-month money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, rose on Wednesday to 3.25 percent, the highest level since November 21, 2018, on liquidity shortages.

On Tuesday, 3-month ROBOR was 3.19 percent.

The 6-month ROBOR increased to 3.39 percent, the highest level since November 27, 2018.

Compared with the end of 2018, the 3-month index rose by 0.23 percentage point, from 3.02 percent. The 3-month ROBOR index reached a record low of 0.68 percent in September 2016.

The highest rates are mainly due to temporary liquidity shortages at the end of the reserve maintenance period, as some players are becoming more anxious and are paying up to secure funding needs, according to experts.

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“The implied funding rates inched higher to 7.00 percent as we approach the end of the reserve maintenance period and this pushed yields up by c 100 basis points up to 1M. The money market curve inverted even more as the upward shift was less ample for longer tenors,” ING Bank analysts said in a research note.

A RON 5.9 billion bond redemption on February 25 could offer some relief though it might be offset by payments to the state budget on the same day, experts estimate.

The Romanian government has introduced a tax on bank assets of 0.3 percent from January 1st, 2019, calculated at the current ROBOR 3M-6M level.