Romania’s 3M money market rate at new 3.5 year-high of 2.42 pct

Sorin Melenciuc 25/04/2018 | 12:07

Romania’s money market rate (ROBOR), the main indicator that sets the interest rates for RON currency borrowers, grew on Wednesday to 2.42 percent at three months, a record level since October 24, 2014, National Bank of Romania (BNR) data show. Experts say the increase is normal and forecast further rises until the end of the year.

Compared with the end of 2017, the 3-month index rose by 0.37 percentage points, from 2.05 percent.

On Tuesday, the ROBOR 3M reached a 3.5-year high of 2.28 percent.

Analysts say the 3-month money market rate should be above the central bank’s policy rate (currently 2.25 percent).

“Considering that ROBOR was below the monetary policy interest rate and the BNR’s operations to absorb liquidity in the market, ROBOR’s growth is normal. Central bank’s operations have a maturity of one week and 2.25 percent interest rate, for a 3-month maturity it is normal to have a premium,” Horia Braun, chief-economist at BCR, told Business Review.

The Romanian central bank had two open market operations durind the last two weeks, absorbing more than RON 18 billion (around EUR 4 billion) each week from the banks through deposit tenders.

BCR’s chief economist 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 increased to 2.54 percent on Wedesday, from 2.52 percent on Tuesday.

 

Photo credit: dreamstime.com

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